As filed with the Securities & Exchange Commission on
November 5, 1996
Registration No. 33-83418-LA
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST EFFECTIVE AMENDMENT NO. 2 TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NW VENTURE CORP.
(Name of Small Business Issuer in Its Charter)
Delaware 6770 93-1138967
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Classifi- Identification)
incorporation or cation Code Number) Number)
organization)
501 S.E. Columbia Shores Boulevard, #350
Vancouver, Washington 98661 (360) 737-6800
(Address and Telephone Number of Principal Executive Offices)
501 S.E. Columbia Shores Boulevard, #350
Vancouver, Washington 98661
(Address of Principal Place of Business or Intended Principal
Place of Business)
Martin Rifkin, President
NW Venture Corp.
501 S.E. Columbia Shores Boulevard, #350
Vancouver, Washington 98661
(360) 737-6800
(Name, Address, and Telephone Number of Agent for Service)
Copies to:
David M. Kaye, Esq.
Danzig, Garubo & Kaye
75 Livingston Avenue
Roseland, New Jersey 07068
(201) 535-5701
Approximate date of proposed sale to the public: As soon as
practicable after the effectiveness of this Registration Statement.
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES OFFERING AGGREGATE
TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRA-
REGISTERED REGISTERED SHARE(1) PRICE (1) TION FEE
<S> <C> <C> <C> <C>
Common Stock,
par value
$.0001
per share 500,000 $0.10 $50,000 $100.00
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
TOTAL REGISTRATION FEE $100.00
</TABLE>
_____________________
(1) Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457.
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant
to Section 8(a), may determine.
<PAGE>
NW VENTURE CORP.
Cross-Reference Sheet Showing Location in Prospectus
of Information Required by Form SB-2
Item Number and Caption Heading in
Prospectus
1. Front of Registration Statement
and Outside Front Cover Page
of Prospectus Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus Cover Page
3. Summary Information and Risk Factors Prospectus
Summary, Risk
Factors
4. Use of Proceeds Prospectus
Summary,
Use of Proceeds
5. Determination of Offering Price Cover Page,
Risk Factors
6. Dilution Dilution
7. Selling Security-Holders Not Applicable
8. Plan of Distribution Cover Page,
Plan of
Distribution
9. Legal Proceedings Litigation
10. Directors, Officers, Promoters and
Control Persons Management
11. Security Ownership of Certain
Beneficial Owners and Management Principal
Stockholders
12. Description of Securities Description of
Securities
13. Interest of Named Experts and Counsel Not Applicable
<PAGE>
14. Disclosure of Commission Position on Indemnification
Indemnification for Securities Act of Directors
Liabilities and Officers
15. Organization Within Last Five Years Management,
Certain
Transactions
16. Description of Business Prospectus
Summary,
Introduction,
Business
17. Management's Discussion and Analysis Management's
or Plan of Operation Discussion and
Analysis,
Business
18. Description of Property Business
19. Certain Relationships and Related Certain
Transactions Transactions
20. Market for Common Equity and Related Description of
Stockholder Matters Securities
21. Executive Compensation Management
22. Financial Statements Financial
Statements
23. Changes in and Disagreements with Not
Accountants on Accounting and Applicable
Financial Disclosure
<PAGE>
Prospectus
NW VENTURE CORP.
500,000 Shares of Common Stock
This Prospectus relates to the reconfirmation offering (the
"Reconfirmation Offering") required pursuant to Rule 419 of
Regulation C under the Securities Act of 1933, as amended (the "Act")
concerning 500,000 shares of Common Stock, $.0001 par value (the "Common
Stock") of NW Venture Corp. (the "Company"). The shares were initially
sold in connection with an initial public offering (the "Offering") of
500,000 shares of Common Stock, which was completed in October
1995. In May 1996, the Company executed an agreement with Cyberia,
Inc., a California corporation, and its shareholders to acquire all of
the issued and outstanding shares of capital stock of Cyberia, Inc.
in exchange for 25,500,000 shares of Common Stock of the Company.
This Prospectus is being furnished to investors in the Offering for
such investors to consider reconfirming their investment in the
Company as a result of the Company's proposed acquisition.
Prior to the Offering and this Reconfirmation Offering,
there has been no market for the Company's Common Stock and there is no
assurance that such a market will exist after the proposed
acquisition is completed by the Company. There are no plans, proposals,
arrangements or understandings with any person with regard to the
development of a trading market in any of the Company's
securities. The market for the Company's securities upon the proposed
acquisition being concluded may be very restricted and liquidity may be
extremely limited. The Offering price of $.10 per share was arbitrarily
established and was not based on earnings or assets of the Company.
(See "Risk Factors" and "Dilution").
________________________
THE OFFERING AND THE RECONFIRMATION OFFERING ARE BEING
CONDUCTED IN ACCORDANCE WITH RULE 419 OF REGULATION C UNDER THE
ACT. RULE 419 WAS DESIGNED, ACCORDING TO THE COMMISSION, TO
STRENGTHEN REGULATION OF SECURITIES OFFERINGS BY BLANK CHECK
COMPANIES WHICH CONGRESS HAS FOUND TO HAVE BEEN A COMMON VEHICLE
FOR FRAUD AND MANIPULATION IN THE PENNY STOCK MARKET. (See "RISK
FACTORS - OFFERING CONDUCTED IN ACCORDANCE WITH RULE 419").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Proceeds
Price to to the
Public Commissions(1) Company(2)(3)
Per Share $.10 $-0- $.10
Total $50,000 $-0- $50,000
(See footnotes on following page)
The Date of This Prospectus is , 1996
(1) The shares were offered directly to the public on
behalf of the Company by Martin Rifkin, the sole officer and
director of the Company. No commissions or any other form of
remuneration was or will be paid to Mr. Rifkin, although his
out-of-pocket expenses will be reimbursed by the Company. No
NASD members or affiliates participated in the Offering.
(2) The figures do not reflect the deduction of offering
expenses estimated to be an aggregate of $14,000 which include
but are not limited to filing fees, printing expenses, legal and
accounting fees and other miscellaneous expenses.
(3) The shares were offered by the Company on a "best
efforts, all or none" basis. All moneys paid by subscribers for
the shares (the "deposited funds") were deposited in a special
non-interest bearing escrow account at United Jersey Bank, 210
Main Street, Hackensack, New Jersey 07602. Jersey Transfer and
Trust Co. of New Jersey and United Jersey Bank are together
serving as the Escrow Agent for the Offering. Except for 10% of
the deposited funds (10% of $50,000, or $5,000) which was
released under Rule 419 upon completion of the Offering, the
deposited funds and the securities to be issued to subscribers
are remaining in escrow and may not be released until an
acquisition meeting certain specified criteria has been made and
a sufficient number of subscribers reconfirm their investment in
accordance with the procedures set forth in Rule 419. While held
in escrow, the securities may not be traded or transferred.
Pursuant to these procedures, the Company must return the
pro-rata portion of the deposited funds to any subscriber who
does not elect to remain a subscriber. Unless a sufficient number of
investors elect to remain subscribers, all subscribers will be
entitled to the return of a pro-rata portion of the deposited
funds and none of the securities will be issued to investors. In
the event an acquisition is not consummated within 18 months of
June 30, 1995 (the effective date of the registration statement
relating to the Offering), the deposited funds will be returned
on a pro-rata basis to all investors. In accordance with the
provisions of Rule 419, if funds held in escrow are released to a
purchaser of the securities, the purchaser shall receive interest
or dividends earned, if any, on such funds up to the date of
release. If funds held in escrow are released to the Company,
interest or dividends earned on such funds up to the date of
release shall be released to the Company. (See "Prospectus
Summary - Investors Rights to Reconfirm Investments Under Rule
419").
Prior to the Offering and the Reconfirmation Offering, there
has been no public market for the Common Stock and no assurance
can be given that a trading market for the Common Stock will
develop subsequent to the completion of the Reconfirmation
Offering or be sustained if developed. The shares will not be
eligible for listing on the Automated Quotation System of the
National Association of Securities Dealers (the "Nasdaq Stock
Market") upon the completion of the Reconfirmation Offering, and
therefore, the Company has not and does not presently intend to
make application to have the shares included on the Nasdaq Stock
Market.
___________________
THE OFFERING AND THE RECONFIRMATION OFFERING INVOLVES A
SPECULATIVE INVESTMENT, A HIGH DEGREE OF RISK, AND SUITABLE ONLY
FOR PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT.
THE SHARES HAVE BEEN REGISTERED ONLY IN THE STATE OF NEW
YORK. PURCHASERS OF SHARES IN THE OFFERING OR IN ANY SUBSEQUENT
TRADING MARKET WHICH MAY DEVELOP MUST BE RESIDENTS OF THE STATE
OF NEW YORK (OR THE DISTRICT OF COLUMBIA, WHERE NO SECURITIES
REGISTRATION PROVISIONS EXIST), UNLESS AND UNTIL THE SHARES HAVE
BEEN REGISTERED OR QUALIFIED FOR SALE IN ADDITIONAL JURISDICTIONS
OR UNLESS AN EXEMPTION IS AVAILABLE AND HAS BEEN OBTAINED. THE
COMPANY WILL AMEND THIS PROSPECTUS FOR THE PURPOSES OF DISCLOSING
ADDITIONAL STATES, IF ANY, IN WHICH THE SHARES WILL HAVE BEEN
REGISTERED OR QUALIFIED.
PURSUANT TO THE TERMS OF THE OFFERING, THE COMPANY'S SOLE
OFFICER AND DIRECTOR, AND HIS AFFILIATES AND ASSOCIATES, WAS
PERMITTED TO PURCHASE A PORTION OF THE SHARES OFFERED UNDER THE
OFFERING, NOT TO EXCEED TEN PERCENT (10%) OF THE NUMBER OF SHARES
BEING OFFERED IN THE OFFERING, UPON THE SAME TERMS AND
CONDITIONS AS OTHER INVESTORS IN THE OFFERING. SUCH PURCHASES
COULD ONLY BE MADE FOR INVESTMENT PURPOSES ONLY AND NOT WITH A
VIEW TO RESALE OR DISTRIBUTION. SUCH PURCHASES COULD BE MADE TO
HELP REACH THE MAXIMUM NUMBER OF SHARES BEING OFFERED SO THAT THE
OFFERING COULD CLOSE. PURSUANT THERETO, THE COMPANY'S SOLE
OFFICER AND DIRECTOR PURCHASED 10% OF THE NUMBER OF SHARES
OFFERED IN THE OFFERING.
THE COMPANY IS SUBJECT TO THE INFORMATIONAL REQUIREMENTS OF
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE
ACT"), AND IN ACCORDANCE THEREWITH, FILES REPORTS AND OTHER
INFORMATION WITH THE SECURITIES AND EXCHANGE COMMISSION. THE
COMPANY INTENDS TO FURNISH TO ITS SHAREHOLDERS, AFTER THE CLOSE
OF EACH FISCAL YEAR, WITH AN ANNUAL REPORT WHICH WILL CONTAIN
AUDITED FINANCIAL STATEMENTS CERTIFIED BY ITS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS. IN ADDITION, THE COMPANY MAY
FURNISH TO ITS SHAREHOLDERS QUARTERLY REPORTS CONTAINING
UNAUDITED FINANCIAL INFORMATION.
No dealer, salesman or other person has been authorized to
give any information or to make any representations other than
those contained in this Prospectus. Any information or
representations not herein contained, if given or made, must not
be relied upon as having been authorized by the Company. This
Prospectus does not constitute an offering or solicitation with
respect to these securities in any jurisdiction in which such
offer or solicitation would be unlawful.
TABLE OF CONTENTS
Page
Prospectus Summary ....................................... 5
Introduction ............................................. 9
Risk Factors ............................................. 9
Dilution ................................................. 16
Dividend Policy........................................... 16
Use of Proceeds........................................... 17
Capitalization............................................ 18
Management's Discussion
and Analysis............................................. 19
Business.................................................. 21
Management................................................ 24
Principal Stockholders.................................... 29
Certain Transactions...................................... 29
Description of Securities................................. 30
Indemnification of Directors
and Officers............................................. 31
Plan of Distribution...................................... 31
Reports to Shareholders................................... 33
Litigation................................................ 33
Legal Opinions............................................ 33
Experts................................................... 34
Additional Information.................................... 34
Financial Statements...................................... F-1
Until 90 days after the date funds and securities are
released from the escrow account pursuant to Rule 419 under the
Act, all dealers effecting transactions in the securities offered
hereby, whether or not participating in this distribution, may be
required to deliver a current prospectus. This is in addition to
the obligation of dealers to deliver a current prospectus when
acting as underwriters and with respect to their unsold
allotments.
PROSPECTUS SUMMARY
This Prospectus, which constitutes part of a Registration
Statement filed by the Company with the Securities and Exchange
Commission under the Act, omits certain of the information
contained in the Registration Statement. Reference is hereby
made to the Registration Statement and to its exhibits for
further information with respect to the Company, the Offering and
Reconfirmation Offering. Statements contained herein concerning
provisions of documents are necessarily summaries of such
documents, and each statement is qualified in its entirety by
reference to the copy of the applicable document filed with the
Commission.
The Company
NW Venture Corp. (the "Company") was organized as a Delaware
corporation on February 24, 1994 for the purpose of creating a
corporate vehicle to seek, investigate and, if such investigation
warrants, acquire an interest in business opportunities presented
to it by persons or firms who or which desire to employ the
Company's funding in their business or to seek the perceived
advantages of a publicly-held corporation. In October 1995, the
Company completed an initial public offering (the "Offering") of
500,000 shares of its Common Stock at a price of $.10 per share
pursuant to a Registration Statement declared effective by the
Securities and Exchange Commission on June 30, 1995. In May
1996, the Company executed an agreement with Cyberia, Inc., a
California corporation ("Cyberia"), and its shareholders to
acquire all of the issued and outstanding shares of capital stock
of Cyberia in exchange for 25,500,000 shares of Common Stock of
the Company (the "Acquisition"). Cyberia is primarily involved
in the business of creating original music for television
commercials. (See "Risk Factors" and "Business").
Negotiations between the Company and Cyberia
Subsequent to the completion of the Offering in October
1995, the Company commenced efforts to seek a business
opportunity in which to acquire. In the course of its
investigation, the Company was contacted by Cyberia. At the
time, the President of Cyberia was Jay Rifkin, the brother of
Martin Rifkin, the founder and then sole officer and director of
the Company. (Jay Rifkin remains President of Cyberia.) Cyberia
indicated that it was interested in seeking the perceived
advantages of a publicly-held corporation and requested
information from the Company with regard to its recently
completed Offering. In turn, Martin Rifkin requested and
received background information on Cyberia including certain
financial information. Once such information was exchanged, the
parties began to negotiate the structure of the transaction. The
Company indicated that it was interested in acquiring all of the
outstanding capital stock of Cyberia so that Cyberia would be a
wholly-owned subsidiary of the Company. Cyberia indicated that
such structure would be acceptable provided that the current
shareholders of Cyberia received such number of shares of Common
Stock which would in the aggregate represent 85% of the
outstanding shares of Common Stock of the Company. An agreement
was thereupon drafted and in May 1996, the Company executed the
agreement with Cyberia and its shareholders to acquire 100% of
the stock of Cyberia in exchange for 25,500,000 shares of Common
Stock of the Company.
The Offering and Reconfirmation Offering
Five Hundred Thousand (500,000) shares of Common Stock were
offered at a purchase price of $.10 per share on a "best efforts,
all or none" basis. The Offering was conducted directly by the
Company without the use of a professional underwriter and was
completed in October 1995. This Prospectus is being furnished to
investors in the Offering for such investors to consider
reconfirming their investment in the Company as a result of the
Company's proposed Acquisition.
Securities Outstanding
There are presently 4,500,000 shares of Common Stock
outstanding of an authorized issuance of 50,000,000 shares of
Common Stock. If the Acquisition is completed, 30,000,000
shares of Common Stock will be outstanding.
Use of Proceeds
The Offering is a "blank check" in that neither the
Company's business nor the use of the proceeds of the Offering
were specified. The Company intends to utilize the net proceeds
to pay general office expenses; for the repayment of loans; to
pay the expenses in connection with identification and evaluation
of business opportunities and structuring and completion of
acquisitions or mergers; and for working capital. (See "Use of
Proceeds").
Risk Factors
Investment in the securities of the Company is highly
speculative and involves many risks. (See "Risk Factors").
Investors Rights to Reconfirm Investment Under Rule 419
Deposit of Offering Proceeds and Securities
Rule 419 requires that the gross offering proceeds, less
deduction for underwriting compensation and underwriting expenses
(for which there were none in the Offering) and all securities to
be issued be deposited into an escrow account (the "deposited
funds" and "deposited securities," respectively) governed by an
agreement which contains certain terms and provisions specified
by Rule 419. Under Rule 419, except for an amount up to 10% of
the deposited funds (10% of $50,000, or $5,000), the deposited
funds and deposited securities will be released to the Company
and to investors, respectively, only after the Company has met
the following three conditions. First, the Company must execute
an agreement for an acquisition(s) meeting certain prescribed
criteria. Second, the Company must successfully complete a
reconfirmation offering which includes certain prescribed terms
and conditions. Third, the acquisition(s) meeting the prescribed
criteria must be consummated (see "Prescribed Acquisition
Criteria" and "Reconfirmation Offering" below).
Accordingly, the Company has entered into an escrow
agreement with Jersey Transfer and Trust Co. of New Jersey and
United Jersey Bank (together, the "Escrow Agent") which provides
that:
(1) The deposited funds are to remain in the escrow account
maintained by the Escrow Agent after completion of the Offering.
The deposited funds are to held for the sole benefit of the
investors and can be only invested in bank deposits, in money
market mutual funds or federal government securities or
securities for which the principal or interest is guaranteed by
the federal government.
(2) All securities issued in connection with the Offering
and any other securities issued with respect to such securities,
including securities issued with respect to stock splits, stock
dividends or similar rights are to be deposited directly into the
escrow account promptly upon issuance. The securities held in
the escrow account are to remain as issued and deposited and are
to be held for the sole benefit of the investors who retain the
voting rights, if any, with respect to the securities held in
their names.
(3) Warrants, convertible securities or other derivative
securities, if any, relating to securities held in the escrow
account may be exercised or converted in accordance with the
terms; provided, however, the securities received upon exercise
or conversion together with any cash or other consideration paid
in connection with the exercise or conversion, are to be promptly
deposited into the escrow account.
Prescribed Acquisition Criteria
Rule 419 requires that before the deposited funds and the
deposited securities can be released the Company must first
execute an agreement(s) to acquire an acquisition candidate(s)
meeting certain specified criteria. The agreement must provide
for the acquisition of a business(es) or assets for which the
fair value of the business(es) represents at least 80% of the
offering proceeds, including funds received or to be received
from the exercise of warrants, but excluding underwriting
commissions, underwriting expenses and dealer allowances payable
to non-affiliates. For purposes of the Offering, the fair value
of the business(es) or assets to be acquired must be at least
$40,000. At June 30, 1996, the fair market value of the business
of Cyberia was approximately $78,500 (representing total assets
less total liabilities). Once the acquisition agreement(s)
meeting the above criteria have been executed, the Company must
successfully complete the mandated reconfirmation offering, as
discussed below, and consummate the acquisition(s).
Post-Effective Amendment
Once the agreement(s) governing the acquisition(s) of (a)
business(es) meeting the above criteria has been executed, Rule
419 requires the Company to update the registration statement
with a post-effective amendment. The post-effective amendment
must contain information about: the proposed acquisition
candidate(s) and its business(es), including audited financial
statements; the results of this offering; and the use of the
funds disbursed from the escrow account. The post-effective
amendment must also include the terms of the reconfirmation offer
mandated by Rule 419. The reconfirmation offer must include
certain prescribed conditions which must be satisfied before the
deposited funds and deposited securities can be released from
escrow.
Reconfirmation Offering
The reconfirmation offer must commence within five business
days after the effective date of the post-effective amendment.
Pursuant to Rule 419, the terms of the reconfirmation offer must
include the following conditions:
(1) The prospectus contained in the post-effective
amendment will be sent to each investor whose
securities are held in the escrow account within five
business days after the effective date of the
post-effective amendment;
(2) Each investor will have no fewer than 20, and no more
than 45, business days from the effective date of the
post-effective amendment to notify the Company in
writing that the investor elects to remain an investor;
(3) If the company does not receive written notification
from any investor within 45 business days following the
effective date, the pro-rata portion of the deposited
funds held in the escrow account on such investor's
behalf will be returned to the investor within five
business days by first class mail or other equally
prompt means;
(4) The acquisition(s) will be consummated only if a
minimum number of investors representing 80% of the
offering proceeds elect to reconfirm their investments;
(5) If a consummated acquisition(s) has not occurred within
18 months from the date of this Prospectus, the
deposited funds held in the escrow account shall be
returned to all investors on a pro-rata basis within
five business days by first class mail or other equally
prompt means.
This Prospectus serves as the prospectus required pursuant
to Rule 419 for investors in the Offering to consider
reconfirming their investment in the Company as a result of the
Company's proposed Acquisition.
Release of Deposited Securities and Deposited Funds
The deposited funds and deposited securities may be released
to the Company and the investors, respectively, after the escrow
agent receives a signed representation from the Company, together
with other evidence acceptable to the escrow agent that the
requirements of paragraphs (e)(1) [that a post-effective
amendment has been filed disclosing information relative to the
acquisition, which acquisition must be for a business or net
assets, with a value of at least 80% of the maximum gross of the
proceeds of the Offering] and (e)(2) [setting forth terms how a
purchaser must confirm his investment or he will have been deemed
not to remain an investor] of Rule 419 have been met, and (ii)
the escrow agent receives a signed representation that the
acquisition has been consummated.
Selected Financial Information
The Company has no operating history and has had no revenues
through the date of this Prospectus. Other financial information
is contained in the financial statements of the Company and
Cyberia, as well as pro forma financial information, which are
included elsewhere in this Prospectus.
INTRODUCTION
NW Venture Corp. (the "Company") was incorporated under
the laws of the State of Delaware on February 24, 1994 for the
purpose of creating a corporate vehicle to seek, investigate and,
if such investigation warrants, acquire an interest in business
opportunities presented to it by persons or firms who or which
desire to employ the Company's funding in their business or to
seek the perceived advantages of a publicly-held corporation. In
October 1995, the Company completed an initial public offering
(the "Offering") of 500,000 shares of its Common Stock at a price
of $.10 per share pursuant to a Registration Statement declared
effective by the Securities and Exchange Commission on June 30,
1995. In May 1996, the Company executed an agreement with
Cyberia, Inc. a California corporation ("Cyberia"), and its
shareholders to acquire all of the issued and outstanding shares
of capital stock of Cyberia in exchange for 25,500,000 shares of
Common Stock of the Company (the "Acquisition").
The Company's offices are located at 501 S.E. Columbia
Shores Boulevard, #350, Vancouver, Washington 98661. Its
telephone number is (360) 737-6800.
RISK FACTORS
The securities subject of this Reconfirmation Offering are
speculative and involve a high degree of risk. Accordingly, in
analyzing this Reconfirmation Offering, investors should
carefully consider the following factors relating to the Company
and Cyberia.
1. Limited History of Operations. Cyberia, formed in
February 1994, has had a limited history of operations. The
likelihood of success of Cyberia must be considered in light of
the risks, expenses, difficulties and delays frequently
encountered in connection with the operation and development of a
business in its early stages. There is, therefore, nothing at
this time upon which to base an assumption that the Cyberia
business will prove successful, and there is no assurance that it
will be able to operate profitably. (See "Business").
2. Dependence on Key Suppliers (Composers). Cyberia's
success depends in part on members of the creative team. The loss
of services of one or more of these key suppliers could have a
material adverse affect on its business or results of operations.
Cyberia believes that its future success will depend upon its
ability to attract, motivate and retain qualified personnel with
the requisite musical talent and technical expertise.
Competition for such personnel is intense. The inability to hire
and retain quality personnel could have a material adverse effect
on Cyberia's business or results of operations.
3. Competition. The markets for Cyberia's services are
intensely competitive and characterized by significant price
competition. Cyberia has a large number of competitors which
range from large national and international concerns to small
owner/operator shops. In addition, there are numerous companies
that compete in the low end and mid price range of the music
production market. Many of the competitors have the advantage of
a larger installed customer bases than Cyberia. Many potential
customers in Cyberia's target markets are often reluctant to
commit significant resources to replace their current supplier.
Furthermore, Cyberia competes with licensors of pre-recorded
music who are able to license their products for a lower price
than creating original music. As a result of the above factors,
there can be no assurance that Cyberia will compete successfully
in the future.
Cyberia believes that its ability to compete depends on
elements both within and outside its control including the
quality of the creative team, success and timing of marketing
and advertising efforts, competitors performance and price and
availability. There can be no assurance that Cyberia will be
able to compete successfully with respect to these factors. In
addition, there can be no assurance that Cyberia will
successfully differentiate its services from the services of its
competitors or that the marketplace will consider Cyberia's
services to be superior to competing services. Moreover,
competitors may introduce additional services that are
competitive with those of Cyberia, and there can be no assurance
that Cyberia's services would compete effectively with such
services.
4. Fluctuations in Quarterly Operating Results. Cyberia's
quarterly operating results fluctuate from quarter to quarter.
Quarterly projections are often sidelined due to circumstances
beyond Cyberia's control.
5. Dependence on Key Employees. Cyberia's success
depends, in part, on its ability to retain key management and
creative employees, including, Hans Zimmer, Jay Rifkin and Mark
S. Levy. The loss of services of one or more of these key
employees could have a material adverse effect on Cyberia.
Management further believes that Cyberia's success is dependent
upon its continued ability to attract and retain highly skilled
creative, management and sales and marketing personnel. The
Company believes that it will need to hire additional management
staff in order to maintain and enhance current business levels.
Competition for such personnel is intense, and there can be no
assurance that Cyberia will attract, assimilate, and retain
personnel with the combination of skills and attributes necessary
to execute Cyberia's strategy. Moreover, there can be no
assurance that employees will not leave the employ of Cyberia and
compete against it, or that the Cyberia's contractors or
consultants will not perform services for competitors of Cyberia.
6. Management of Growth. Cyberia's ability to manage its
growth, if any, will require it to continue to improve and expand
its management, operational and financial systems and controls.
If management is unable to manage growth effectively, its
business and results of operations will be adversely affected.
In the normal course of business, management evaluates potential
acquisitions of businesses, products and technologies that could
complement or expand Cyberia's business. To date, Cyberia has
not made any acquisitions. In the event management were to
identify an appropriate acquisition candidate, there is no
assurance that management would be able to successfully negotiate
the terms of any such acquisition or integrate such acquired
business, products or technologies into Cyberia's existing
business and operations. Furthermore, the integration of an
acquired business could case a diversion of management time and
resources. There can be no assurance that a given acquisition,
when consummated, would not materially adversely affect Cyberia's
business and results of operations.
7. Business Interruptions and Dependence on a Single
Facility. Cyberia's primary operations, including creative,
recording, management information systems, customer service,
distribution and general administration are housed in a single
facility in Santa Monica, California. Any disruption of
Cyberia's day to day operations could have a material adverse
affect upon its business. There can be no assurance that a fire,
flood, earthquake or other disaster affecting Cyberia's facility
in Santa Monica would not disrupt these functions. Any
significant damage to this facility would have a material adverse
affect on Cyberia's business and results of operations.
8. Additional Conflicts of Interest. All of the Company's
proposed officers and directors are involved in various business
activities. With respect thereto, they are or may become
officers, directors, controlling shareholders and/or partners of
other entities engaged in a variety of businesses, similar and
dissimilar to the business of the Company. Because of these
affiliations, there are potential conflicts of interest in their
acting as officers and directors of the Company. To the extent
the Company's officers and directors engage in such other
activities, they will have possible conflicts of interest in
directing opportunities to other companies, entities or persons
with which they are or may be associated or have an interest,
rather than direct such opportunities to the Company. Such
potential conflicts of interest include, among other things,
time, effort and corporate opportunity involved in their
participation in other business transactions. Since no policy
has been established for the resolution of such a conflict, the
Company may be adversely affected should they choose to place
their other business interests before those of the Company. No
assurance can be given that such potential conflicts of interest
will not cause the Company to lose potential opportunities.
Additional conflicts of interest and non arm's-length
transactions may also arise in the future in the event the
Company's officers and directors are involved in the management,
or are stockholders, of any company which the Company may
transact business. (See "Management - Potential Conflicts of
Interest and Other Blank Check Offerings").
9. Limitation on Liability of Directors. The Company's
Certificate of Incorporation provides that a director of the
Company will not be personally liable to the Company or its
shareholders for monetary damages resulting from breaches of his
fiduciary duty of care as a director, including breaches which
constitute gross negligence. As a result, the rights of the
Company and its shareholders to obtain monetary damages for acts
or omissions of directors will be more limited than they would be
in the absence of such provision. The provision would not apply
to a violation of a director's responsibility under the Federal
securities laws.
10. No Full-Time Management. Each of the Company's
proposed officers and directors will be devoting only a portion
of his or her working time to the affairs of the Company. The
amount of time which the officers and directors of the Company
are able to devote to Company business may be inadequate to
properly attend to Company business.
11. Offering Conducted in Accordance With Rule 419. The
Company's Offering and this Reconfirmation Offering are being
conducted in accordance with the Commission's Rule 419 which was
adopted to strengthen the regulation of securities offerings by
"blank check" companies, which Congress has found to have been
common vehicles for fraud and manipulation in the penny stock
market. The Company is a "blank check" company and therefore is
subject to Rule 419. Accordingly, investors in the Offering
receive the substantive protection provided by Rule 419. Rule 419
requires that the securities to be issued and the funds received
in a "blank check" offering be deposited and held in escrow
account until an acquisition meeting specific criteria is
completed. Before the acquisition can be completed and before
the funds (except for an amount up to 10% of the deposited funds)
and securities can be released, the "blank check" company is
required to update its registration statement with a
post-effective amendment and, after the effective date therefor,
the "blank check" company is required to furnish investors with a
prospectus (which forms a part of the post-effective amendment to
its registration statement) containing specified information,
including a discussion of the business and the audited financial
statements of the proposed acquisition candidate. According to
the Rule, the investors must have no fewer than 20 and no more
than 45 business days from the effective date of the
post-effective amendment to decide whether to remain an investor
or require the return of their investment funds. Unless a
sufficient number of investors elect to remain investors, all of
the deposited funds in the escrow account must be returned to all
investors and none of the securities will be issued. Rule 419
further provides that if the "blank check" company does not
complete an acquisition meeting the specified criteria within 18
months of the date of this Prospectus, all of the deposited funds
must be returned to investors. Accordingly, there is a risk that
investors may have their funds tied up for up to 18 months,
without the ability to use them, and have them returned at the
end of that time without interest. This Prospectus serves as the
prospectus required pursuant to Rule 419 for investors in the
Offering to consider reconfirming their investment in the Company
as a result of the Company's proposed Acquisition. (See
"Prospectus Summary - Investors Rights to Reconfirm Investment
Under Rule 419").
12. Failure of Sufficient Number of Investors to Reconfirm
Investment. Unless investors representing 80% of the maximum
offering proceeds elect to remain investors, the consummation of
the proposed Acquisition would be prevented and all of the
deposited funds in the escrow account must be returned to all
investors and none of the securities will be issued. Rule 419
further provides that if the blank check company does not
complete an acquisition meeting specified criteria within 18
months of the effectiveness of the initial registration statement
(June 30, 1995), all of the deposited funds in the escrow account
must be returned to investors.
13. Lack of Public Market for Securities. At the present
time, there is no public market for the securities of the
Company. It is unlikely that a regular trading market will
develop at the conclusion of the Reconfirmation Offering, or if
developed, that such market will be sustained, or that the
securities purchased by the public in the Offering may be resold
at their original offering price or at any other price. Any
market for the securities that may develop will, in all
likelihood, be a limited one. While the Company intends to
timely file periodic reports under the Securities Exchange Act of
1934 for so long as it may be required to do so, no assurances
are given that the Company will continue to file such reports on
a voluntary basis. In such event, the Company may, although no
assurances are given, furnish to interested broker-dealers, if
any, the information specified under Rule 15c2-11 which would
allow them, in their sole discretion, to make a market in the
Company's securities. In any event, due to the low price of the
securities, many brokerage firms may choose not to engage in
market making activities or effect transactions in such
securities. Purchasers of the securities may have difficulties
in reselling such securities and many banks may not grant loans
utilizing such securities as collateral. Further, the Company's
securities will not be eligible for listing on the Nasdaq Stock
Market upon completion of this Reconfirmation Offering.
14. Cumulative Voting and Pre-Emptive Rights. There are no
pre-emptive rights in connection with the Company's Common Stock.
Therefore, the shareholders purchasing in the Offering will be
further significantly diluted in their percentage ownership of
the Company in the event the Company completes the proposed
Acquisition and issues 25,500,000 shares of its Common Stock to
the current shareholders of Cyberia. Cumulative voting in the
election of directors is not allowed. Accordingly, the holders
of a majority of the shares of Common Stock, present in person
or by proxy, will be able to elect all of the Company's Board of
Directors. In such event, Martin Rifkin (see "Management") and
the current shareholders of Cyberia will own approximately 98% of
the shares then outstanding and will be in a position to elect
all of the Company's Board of Directors and otherwise control the
Company.
15. Dilution. The present sole officer and director of the
Company acquired his Common Stock at a cost substantially less
than that paid by the public investors. Further, there will be
immediate substantial dilution of the public's investment in the
Company in that the net tangible book value of the Common Stock
after the Reconfirmation Offering and Acquisition will be
substantially less than the public price. (See "Dilution").
16. Determination of Offering Price. The public offering
price of the shares was arbitrarily determined by the Company
and has no relationship to book value, assets, earnings or any
other accepted criteria of value. Accordingly, the price should
not be considered as an indication of the actual value thereof or
any future value.
17. Shares Available for Resale. All of the Company's
presently outstanding Common Stock may be deemed "restricted
securities" and may be sold in compliance with Rule 144 adopted
under the Securities Act of 1933, as amended. Rule 144 provides,
in essence, that after a 2-year holding period, the person may
sell the greater of an amount equal to one percent of the
outstanding Common Stock every three months or the average
weekly trading volume for the previous four weeks. After three
years, shareholders who are not affiliates of the Company may
sell their shares without regard to volume limitations and other
requirements. Sales under Rule 144 may have a depressive effect
on the market price of the Company's Common Stock. The first
date on which the resale provisions of Rule 144 was available to
Martin Rifkin, who owns all of the Company's outstanding
"restricted securities" (4,000,000 shares) was April 21, 1996.
18. No Underwriter. The Offering was conducted by the
Company without the assistance of an underwriter. Consequently,
the terms of the Offering were not negotiated, but rather merely
reflect the determination of the Company's Management as to the
terms required to sell up to $50,000 of the Company's securities
to the public. Because no underwriter was utilized, there can
be no assurance that any broker-dealer will be willing to make a
market in the Company's securities.
19. Dividends. At the present time the Company does not
anticipate paying dividends on its Common Stock in the
foreseeable future. Any future dividends will depend on
earnings, if any, of the Company, its financial requirements and
other factors.
20. Issuance of Shares in Acquisition. The Certificate of
Incorporation of the Company authorizes the issuance of a
maximum of 50,000,000 shares of Common Stock, $.0001 par value.
The proposed Acquisition, if completed by the Company, will
result in the issuance of an additional 25,500,000 shares of
Common Stock and will result in substantial dilution in the
percentage of the Company's Common Stock held by the Company's
then-shareholders. Moreover, the Common Stock to be issued in
the Acquisition has been valued on an arbitrary or non
arm's-length basis by management of the Company, resulting in an
additional reduction in the percentage of Common Stock held by
the Company's then-shareholders.
21. Offering is Subject to Penny Stock Rules. The
Company's Common Stock is covered by a Securities and Exchange
Commission rule that imposes additional sales practice
requirements on broker/dealers who sell such securities to
persons other than established customers and accredited investors
(generally institutions with assets in excess of $5,000,000 or
individuals with net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their
spouses). For transactions covered by the rule, the broker/dealer
must make a special suitability determination for the purchaser
and have received the purchaser's written agreement to the
transaction prior to the sale. Consequently, the rule may affect
the ability of purchasers in this offering to sell their shares
in the secondary market. In addition, Securities and Exchange
Commission rules impose additional sales practice requirements on
broker/dealers who sell penny securities. These rules require a
summary of certain essential items. The items include the risk of
investing in penny stocks in both public offerings and secondary
marketing; terms important to an understanding of the function of
the penny stock market, such as "bid" and "offer" quotes, a
dealers "spread" and broker/dealer compensation; the
broker/dealer compensation, the broker/dealers duties to its
customers, including the disclosures required by any other penny
stock disclosure rules; the customers rights and remedies in
cases of fraud in penny stock transactions; and, the NASD's toll
free telephone number and the central number of the North
American Securities Administrators Association, for information
on the disciplinary history of broker/dealers and their
associated persons. The additional burdens imposed upon
broker/dealers by such requirements may discourage broker/dealers
from effecting transactions in the Common Stock, which could
severely limit the market of the Company's Common Stock. (See
"Plan of Distribution").
22. Return of Investment to Purchasers. Pursuant to
applicable rules of the Securities and Exchange Commission, all
funds from the sale of securities will be placed in an escrow
account. Pursuant to Rule 419, the Company was permitted to
withdraw 10% of the gross offering proceeds (10% of $50,000, or
$5,000) to pay certain expenses. The balance is being held in
escrow until a potential merger/acquisition is found, at which
time all shareholders have the option to withdraw their
proportionate share of the balance, and return their shares as
provided for in this Prospectus. This may result in substantial
reduction of capital to the Company. (See "Plan of
Distribution").
23. Limitations on Sale and Resale of the Company's
Securities. Many states have enacted special laws pertaining to
initial and secondary trading of the securities of blank check
companies. In many cases the sale and resale of securities of a
blank check company is restricted or even prohibited, so that the
shares being offered would not be eligible for trading in such
states until after the consummation of a merger or acquisition.
The shares have been registered or qualified for sale only in the
State of New York. Trading in the shares after the
Reconfirmation Offering would be limited to residents of the
State of New York and the District of Columbia (where no
securities registration provisions exist) until such time as the
shares may lawfully be traded pursuant to registration,
qualification, or applicable exemption, or subsequent to
consummation of the Acquisition. Until such time as the shares
may lawfully be traded in additional jurisdictions, investors
must assume that the shares may be sold or resold only in New
York and in the District of Columbia. Upon the Company's
completion of the Acquisition, its securities may become eligible
for sale in additional states, if sales are made in compliance
with applicable state securities laws.
24. Prohibition Pursuant to Rule 15g-8 Under Exchange Act
to Sell or Offer to Sell Shares in Rule 419 Account. According
to Rule 15g-8 under the Exchange Act, it shall be unlawful for
any person to sell or offer to sell the shares (or any interest
in or related to the shares) held in the Rule 419 account other
than pursuant to a qualified domestic relations order. As a
result, contracts for sale to be satisfied by delivery of the
deposited shares (e.g., contracts for sale on a when, as, and if
issued basis) are prohibited. Such rule prohibits sales of other
interests based on the shares, whether or not physical delivery
is required.
DILUTION
As of June 30, 1996, there were 4,500,000 shares of the
Company's Common Stock outstanding (adjusted to reflect
successful completion of the Reconfirmation Offering) having a
net tangible book value of $42,443 or approximately $.01 per
share. Net tangible book value is the net tangible assets of
the Company (total assets less total liabilities and intangible
assets). (See "Financial Statements"). The net tangible book
value of the Company as of June 30, 1996 on an unaudited pro
forma combined basis taking into account the acquisition of
Cyberia and issuance of 25,500,000 shares of Common Stock to the
present shareholders of Cyberia was $120,238 or approximately
$.004 per share (based on 30,000,000 outstanding shares of Common
Stock). The result will be an immediate dilution to present
shareholders of the Company, including a substantial dilution to
the public investors. The following table illustrates this
dilution:
Public offering price per share ................. $.10
Net tangible book value
per share....................................... $.01
Pro forma net tangible book value
per share(1).................................... $.004
(1) Assumes the acquisition of Cyberia and issuance of
25,500,000 shares of Common Stock to the present
shareholders of Cyberia.
DIVIDEND POLICY
The Company has not paid any dividends on its Common Stock.
The payment of future dividends will rest with the discretion of
the Board of Directors, and will depend upon the Company's
earnings, if any, capital requirements, financial condition and
other factors. The Company presently believes that in the
foreseeable future, all of its earnings, if any, will continue to
be retained for use in its business and, therefore, there is no
assurance when, or if ever, dividends may be paid.
USE OF PROCEEDS
In connection with the Offering, the Company raised gross
proceeds of $50,000. Rule 419 requires that the gross offering
proceeds, less (i) deduction for underwriting compensation and
underwriting expenses (for which there were none in the Offering)
and (ii) an amount up to 10% of the deposited funds, remain in
escrow and may not be released until an acquisition meeting
certain specified criteria has been made and a sufficient number
of investors reconfirm their investment in accordance with the
procedures set forth in Rule 419. In accordance therewith, upon
completion of the Offering, $5,000 (10% of the proceeds) was
released to the Company. As a result, $45,000 of the offering
proceeds remain in escrow.
In connection with the application of the gross proceeds
disbursed to date to the Company ($5,000), such amount was used
to pay certain of the offering expenses (estimated to be an
aggregate of $14,000 including but not limited to filing fees,
printing expenses, legal and accounting fees and other
miscellaneous expenses). None of such proceeds was paid to the
Company's sole officer and director, his affiliates or
associates, either directly or indirectly. The net proceeds of
the Offering, therefore, after deducting estimated expenses
($5,000 of which has been paid) are expected to be $36,000.
It is intended that the net proceeds will be expanded
approximately as follows after successful completion of the
Reconfirmation Offering:
Approximate Approximate Percentage
Amount of Net Proceeds
General Office Expenses (1) $ 2,000 5.6%
Repayment of Loans (2) 4,607 12.8%
Expenses incurred in connection
with the identification and
evaluation of business
opportunities; and structuring
and completion of acquisitions
or mergers:
Professional Services (legal
and accounting) (3) 8,000 22.2%
Travel Expenses 3,000 8.3%
Working Capital(4)(5) 18,393 51.1%
Total $36,000 100.0%
(1) Includes telephone, postage, supplies, copying and
other miscellaneous office expenses.
(2) In April 1994, the Company borrowed $4,000 from Martin
Rifkin in order to pay certain operating expenses of the
Company and expenses of this offering. Such loans are due
on demand and bear interest at 7% per annum. As of June 30,
1996, a total of $4,607 is owing to Mr. Rifkin representing
principal of $4,000 and accrued interest of $607.
Additional interest to be accrued after June 30, 1996 shall
be repaid out of the proceeds allocated to working capital.
(3) Includes expenses associated with particular merger or
acquisition transactions such as preparing post-effective
amendments, Form 8-K's, merger agreements and other related
reports and documents.
(4) The Company expects that this money will be available to be
used in connection with the working capital needs of the
business the Company acquires.
(5) The Company may, prior to completion of the Reconfirmation
Offering, borrow additional funds, not to exceed an
aggregate of $5,000, from the Company's sole officer and
director, or his affiliates, in order to pay expenses of the
Company. Any such borrowings will be repaid out of the
proceeds allocated to working capital.
The Company does not intend paying a cash finder's fee from
the offering proceeds to any person or entity in connection with
any acquisition.
None of the proceeds of the Offering will be used to make
any loans to the Company's promoters, management or their
affiliates or associates or any of the Company's shareholders.
Pending the utilization of the proceeds, Management intends
to make temporary investment in bank certificates of deposit,
interest-bearing savings accounts, prime commercial paper or
government obligations. Such investment in interest-bearing
assets, if continued for an excessive period of time within the
definition of the Investment Company Act of 1940, could subject
the Company to classification as an "investment company" under
the Act and to registration and reporting requirements
thereunder.
CAPITALIZATION
The capitalization of the Company, as of the date of
this Prospectus, and as adjusted to give effect to the issuance
of shares to the shareholders of Cyberia upon completion of the
proposed Acquisition, is as follows:
Amount to be
Amount Outstanding
Title of Class Authorized Outstanding After Acquisition
Common stock, 50,000,000 4,500,000 30,000,000
par value
$.0001
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion should be read in conjunction with
the Financial Statements and Notes thereto and is qualified in
its entirety by the foregoing and by other more detailed
financial information appearing elsewhere in this Prospectus.
NW Venture Corp.
The Company is in the development stage as of June 30, 1996
and completed an initial public offering (the "Offering") in
October 1995 pursuant to a Registration Statement declared
effective by the Securities and Exchange Commission on June 30,
1995 and sold 500,000 shares of its Common Stock, $.0001 par
value, at a price of $.10 per share. The Offering was conducted
directly by the Company without the use of a professional
underwriter. The Company is a "blank check" company subject to
Rule 419 of Regulation C which was organized to obtain funding
from persons purchasing in the Offering in order to provide a
vehicle to take advantage of business opportunities which
management believes arise from time to time.
Except for 10% of the deposited funds (10% of $50,000 or
$5,000) which was released under Rule 419 upon completion of the
Offering, the deposited funds and the securities to be issued to
subscribers are remaining in escrow and may not be released until
an acquisition meeting certain specified criteria has been made
and a sufficient number of subscribers reconfirmed their
investments in accordance with the procedure set forth in Rule
419.
The Company had no revenues for each of the years ended
December 31, 1995 and December 31, 1994. The Company had a net
loss of $(385) for the year ended December 31, 1995 as compared
to a net loss of $(220) for the year ended December 31, 1994. In
addition, at December 31, 1995, the Company had total assets of
$47,377 (which amount includes $45,342 of deposited funds being
held in escrow pursuant to Rule 419) and total liabilities of
$4,474.
The Company had no revenues for the three and six months
ended June 30, 1996. The Company had a net loss of $(72) and
$(202) for the three and six months ended June 30, 1996 as
compared to a net loss of $(79) and $(315) for the three and six
months ended June 30, 1995. In addition, at June 30, 1996, the
Company had total assets of $47,315 (which amount includes
$46,376 of deposited funds being held in escrow pursuant to Rule
419) and total liabilities of $4,614.
In May 1996, the Company executed an agreement with Cyberia,
Inc., a California corporation ("Cyberia"), and its shareholders
to acquire all of the issued and outstanding shares of capital
stock of Cyberia in exchange for 25,500,000 shares of Common
Stock of the Company (the "Acquisition"). Assuming successful
completion of this Reconfirmation Offering and the Acquisition,
the business of Cyberia shall be the sole business of the
Company.
Cyberia, Inc.
Cyberia was incorporated in the State of California in
February 1994. Its business primarily consists of creating
original music for television commercials. Cyberia has retained
the services of various composers to create original music for
use by the advertising industry to promote products and services.
Results of Operations
Net sales for the year ended December 31, 1995 increased to
$488,237 as compared to net sales for the year ended December
31, 1994 of $93,307, an increase of $394,930. This increase is
primarily due to Cyberia's relative inactivity during 1994
subsequent to its incorporation in February 1994.
Cyberia reported an operating loss of $(45,030) for the year
ended December 31, 1995 as compared to net income of $14,055 for
the year ended December 31, 1994. This change resulted primarily
from the increase in total expenses in 1995 of $529,445 compared
to total expenses of $78,452 in 1994 when Cyberia was relatively
inactive. In addition, in 1995, Cyberia incurred various costs
and expenses normally associated with a start-up business.
Sales for the three and six months ended June 30, 1996
increased to $311,356 and $618,215 as compared to sales for the
three and six months ended June 30, 1995 of $156,760 and
$251,260. Cyberia reported net income of $25,649 and $108,448
for the three and six months ended June 30, 1996 as compared to
net income of $14,555 and $34,464 for the three and six months
ended June 30, 1995. This change resulted primarily from an
increase in sales in the first six months of 1996 compared to the
first six months of 1995 when Cyberia emerged from a relatively
inactive 1994. Total expenses for the six months ended June 30,
1996 were $439,753 as compared to $212,870 for the six months
ended June 30, 1995. This change is primarily due to costs
associated with the increase in sales for the first six months of
1996 as compared to the comparable 1995 period.
Cyberia's effective tax rate increased from 10.6% for the
six months ended June 30, 1995 to 39.8% for the six months ended
June 30, 1996 due to the Cyberia revoking its S corporation
status effective January 1, 1996. The tax provision for the six
months ended June 30, 1995 only reflects the minimum state taxes
imposed on an S corporation whereas the tax provision for the six
months ended June 30, 1996 reflects the federal and state (net of
federal tax benefit) taxes imposed on a C corporation.
Liquidity and Capital Resources
At June 30, 1996, Cyberia had working capital of $63,990
compared to a working capital deficit of $(35,453) at December
31, 1995. The ratio of current assets to current liabilities was
approximately 1.41 to 1 at June 30, 1996 compared to 1 to 1.22 at
December 31, 1995. At June 30, 1996, Cyberia had stockholders'
equity of $78,473 compared to a stockholders' deficiency of
$(29,975) at December 31, 1995. This increase in working capital
and stockholders equity is primarily due to an increase in cash
flow from operating activities achieved during the first six
months of 1996, resulting in an increase in cash at June 30,
1996, reduction in accounts payable and accrued expenses and an
elimination of deferred income of $148,157.
To date, Cyberia has funded its activities principally from
cash flow generated from operations. It is anticipated that
Cyberia's continuing cash flow from operations will be sufficient
to meet its cash and working capital requirements at least
through 1997.
BUSINESS
Introduction
The Company was organized under the laws of the State of
Delaware on February 24, 1994. The Company was organized for
the purpose of creating a corporate vehicle to seek, investigate
and, if such investigation warrants, acquire an interest in
business opportunities presented to it by persons or firms who or
which desire to employ the Company's funding in their business or
to seek the perceived advantages of a publicly-held corporation.
In October 1995, the Company completed an initial public offering
(the "Offering") of 500,000 shares of its Common Stock at a price
of $.10 per share pursuant to a Registration Statement declared
effective by the Securities and Exchange Commission on June 30,
1995. In May 1996, the Company executed an agreement with
Cyberia, Inc. a California corporation ("Cyberia"), and its
shareholders to acquire all of the issued and outstanding shares
of capital stock of Cyberia in exchange for 25,500,000 shares of
Common Stock of the Company (the "Acquisition").
Assuming successful completion of this Reconfirmation
Offering and the Acquisition, the business of Cyberia shall be
the sole business of the Company.
Background and History of Cyberia
Cyberia was incorporated in the State of California in
February 1994 by Grammy Award winning producer Jay Rifkin and
Academy Award winning composer Hans Zimmer to create original
music for television commercials. Cyberia has retained the
services of various composers to create original music for use by
the advertising industry to promote products and services. Such
original music is produced, recorded and mixed at the recording
studio of Media Ventures, which is operated by Jay Rifkin and
Hans Zimmer located in Santa Monica, California. To date, the
music created and produced by Cyberia has played a role in the
production in television advertising for various products and
services.
For the year ended December 31, 1995, Cyberia had net sales
of approximately $488,000, while for 1994, Cyberia had net sales
of approximately $93,000 due primarily to its relative inactivity
during 1994 subsequent to its incorporation. For the first six
months of 1996, Cyberia had net sales of approximately $618,000,
approximately $130,000 more in net sales compared to net sales
for the entire 1995 calendar year. During 1995, Cyberia provided
its services for approximately 25 projects, compared to
approximately 6 projects in 1994. For the first six months of
1996, Cyberia has provided its services for approximately 17
projects.
Overview of Business and Production Process
The services of Cyberia are retained by either a commercial
production company or advertising agency. In connection
therewith, Cyberia has retained the services of sales
representatives who offer Cyberia's services to potential clients
in various territories. Such territories to date include the
United States, Japan, Germany, Netherlands and France. The sales
representative will explain the services of Cyberia by showing
the potential client a demonstration video reel, featuring
commericals that Cyberia has scored, that are representative of
the quality of music composed and the production standards
employed by Cyberia. If the agency is interested in the work of
Cyberia, the sales representative will arrange a meeting, usually
by conference call, with the Executive Music Producer and the
Agency Producer to discuss generally the musical style required.
The Executive Producer will negotiate the production budget and
check schedules of the desired composer. The Executive Producer
will then submit to the Agency Producer, a written bid outlining
all the costs involved producing a piece of original music for
the agency. The Agency Producer will then evaluate the bid and
when accepted, submit to Cyberia a purchase order agreeing to the
costs to be incurred. Cyberia will then invoice the agency for
one-half of the above budget prior to the beginning of the
project.
A meeting will then be arranged, by conference call or by
personal meeting, with the Executive Music Producer, the composer
and the advertising agency creative team. A discussion will
usually entail the commerical's visual style, meaning and target
demographies so that Cyberia has a clear understanding of the
musical direction. After the commercial is shot and edited, the
composer will receive a copy of the commerical on video tape.
The composer will have a room setup with his composing equipment,
keyboards, guitars, samplers and effects gear. The composer will
then write a piece of music based upon the input of the client
and a meeting will be held to play the new music for the client.
After the music is finally approved by the agency, it may also
need the approval of the agency's client. Upon receipt of the
final approval, the music is recorded to digital audio tape,
musicians are hired to play and the music is mixed by an audio
engineer. The final music is delivered by the agency producer on
DAT (high quality digital audio tape). The invoice for the
remainder of the approved budget is then forwarded to the client.
Revenues and Clients
Cyberia's revenues to date have primarily derived from
production fees. Cyberia will generally realize 50% of the
production fees upon a contract award and the final 50% is
normally received within 60 days of the final invoice.
Cyberia's clients are primarily domestic and foreign
advertising agencies and commercial production companies. The
Company's services are marketed primarily through its sales
representatives who offer Cyberia's services to such advertising
agencies and commercial production companies. (See "Business-Overview
of Business and Production Process"). During the year
ended December 31, 1995, Cyberia did business with three
customers (each an advertising agency) whose sales comprised
approximately 10% (DDB Needham-Tracey/Locke), 19% (Fallon
McElligott) and 35% (Leo Burnett & Company), respectively, in net
sales. Cyberia does not, however, believe the loss of any single
customer would have a material adverse effect on its operations.
Competition
The markets for Cyberia's services are intensively
competitive and characterized by significant price competition.
Cyberia has a large number of competitors which range from large
national and international concerns to small owner/operator
shops. In addition, there are numerous other entities which
compete in the low end and mid-price range in the music
production market. Many of the competitors have the advantage of
larger installed customer bases then Cyberia. Many potential
customers in Cyberia's target markets are often reluctant to
commit significant resources to replace their current suppliers.
In addition, Cyberia competes with licensors of pre-recorded
music who are able to license their products at a lower price
than creating original music. As a result of the above factors,
there can be no assurance that Cyberia will compete successfully
in the future.
Cyberia believes that its ability to compete depends on
elements both within and outside its control including the
quality of the creative team, success and timing of marketing and
advertising efforts, the performance of competitors and price and
availability. There can be no assurance that Cyberia will be
able to compete successfully with respect to these factors. In
addition, there can be no assurance that Cyberia will
successfully differentiate its services from the services of its
competitors or that the marketplace will consider Cyberia's
services to be superior to the competing services. Moreover,
Cyberia's competitors may introduce additional services that are
competitive with those of Cyberia, and there can be no assurance
that Cyberia's services can compete effectively with such new
services.
Employees
Cyberia currently employs eight persons, four of whom are
the officers of Cyberia, two of whom are technical staff and two
of whom are office administrators. In addition, Cyberia has
obtained the services of outside sales representatives to market
Cyberia's services, and composers to create original music for
Cyberia's projects.
Property
Cyberia maintains its executive offices pursuant to an oral
agreement, on a month-to-month basis, in office space provided by
Media Ventures, which is owned by Jay Rifkin and Hans Zimmer (see
"Management"). Such offices are located at 1547 14th Street,
Santa Monica, California 90404, and are leased by Media Ventures
from a third party. Rent expense paid by Cyberia to Media
Ventures was $28,800 and $19,200 for 1995 and 1994, respectively.
Cyberia believes these premises are suitable for its present
needs and does not anticipate the need to identify and lease any
other premises.
MANAGEMENT
Directors and Executive Officers
Upon successful completion of the proposed Acquisition, the
Company's Directors and Executive Officers are expected to be as
follows:
Name Age Position
Jay Rifkin 41 President, Chief Executive
Officer, Treasurer
and Director
Hans Zimmer 39 Vice President, Secretary and
Director
Mark S. Levy 29 Executive Vice President, General
Manager
Elisa M. Perlman 29 Financial Manager
Martin Rifkin 35 Director
All officers and directors are expected to serve for a term
of one year or until their successors are duly qualified and
appointed.
Jay Rifkin has been President, Chief Executive Officer and a
Director of Cyberia since its inception in February 1994. Since
1989, Mr. Rifkin has been President of Mojo Music, Inc. which is
a general partner of Media Ventures, which operates a recording
studio in Santa Monica, California. Mr. Rifkin is an award
winning music producer and engineer having received a Grammy
Award as Producer for Best Children's Album and American Music
Awards for Producer of Best Album and Best Soundtrack. Jay
Rifkin is the brother of Martin Rifkin. Jay Rifkin intends to
devote up to 10% of his time to the business of the Company.
Hans Zimmer has been Vice President and a Director of
Cyberia since its inception in February 1994. Mr. Zimmer has
been President of Remote Control Productions, Inc., which is a
general partner of Media Ventures since 1989. Mr. Zimmer is an
award winning composer having received an Academy Award and
Golden Globe for Best Original Score for "The Lion King". He
also received a Grammy Award as Producer of Best Children's Album
and Best Instrumental Arrangement with Accompanying Vocalist for
"The Lion King". Mr. Zimmer also received an Academy Award
Nomination for Best Original Score for the film "Rainman". He
has composed the scores for numerous other major motion pictures
including but not limited to "Black Rain", "Driving Miss Daisy",
"Bird on a Wire", "Days of Thunder", "Pacific Heights", "Thelma &
Louise", "Crimson Tide" and "Nine Months". Hans Zimmer intends
to devote up to 10% of his time to the business of the Company.
Mark S. Levy has been Executive Vice President and General
Manager of Cyberia since its inception in February 1994. Mr.
Levy has also served as General Manager of Media Ventures since
June 1993. Previously thereto, and from 1992 to 1993, he served
as Production Auditor for Propaganda Films in Los Angeles. Mr.
Levy also co-founded an independent record company and served as a
Financial Analyst at Geffen Records from 1991 to 1992. Mr. Levy
intends to devote approximately 50% of his time to the business of the
Company.
Elisa M. Perlman has been Financial Manager of Cyberia since
its inception in February 1994. Ms. Perlman has also served as
Financial Manager of Media Ventures since June 1993. Previously,
from 1991 to 1993, she worked as the accountant for the business
management firm Savitsky, Satin and Geibelson, who at the time
were the business managers for Hans Zimmer, Jay Rifkin and Media
Ventures. She received her C.P.A. in 1991, while working as a
senior in the tax and audit departments at Kenneth Leventhal and
Company. Ms. Perlman intends to devote approximately 40% of her
time to the business of the Company.
Martin Rifkin has been President, Secretary, Treasurer
and a Director of the Company since its inception. Upon
completion of the proposed Acquisition, it is expected that he
will resign as President, Secretary and Treasurer of the Company
and remain a Director. Mr. Rifkin has no present intention to
resign as a Director in the near future. Since December 1985,
Mr. Rifkin has been a Director of Nutrition Now Incorporated
("Nutrition Now"), a company which manufactures and markets
nutritional supplements and, since November 1987, he has been its
Secretary and Treasurer and since February 1992, its President.
Also, from August 1988 to February 1992, he was its Vice
President. In addition, Mr. Rifkin has been, since April 1985, a
Director of Nova International Films, Inc. ("Nova"), a company
which principally has been engaged in the business of financing
and producing motion pictures, and from April 1985 to October
1994, he was its Vice President, and since October 1994, he has
been its President and Treasurer. Such company is at the present
time relatively inactive. In addition, Mr. Rifkin has been
Treasurer and Director of Profit Merchandising Corp. ("PMC")
since September 1983 and Vice President since June 1985. PMC is
engaged in the distribution of weatherstripping products. Martin
Rifkin is the brother of Jay Rifkin.
Nutrition Now previously filed reports and other information
with the Commission pursuant to Section 15(d) of the Exchange Act
but filed a Form 15 on September 28, 1990 which suspended its
obligation to file reports with the Commission. Nova is
currently subject and files reports pursuant to Section 15(d) of
the Exchange Act. PMC previously filed under a Regulation A
offering but does not file reports with the Commission. Such
offering was filed with the Commission on February 17, 1984 and
authorized by the Commission to commence as of June 5, 1984.
Executive Compensation
The current sole officer and director (Martin Rifkin) of the
Company has received no cash compensation to date and the Company
has no employment agreement with him. He will receive no
compensation for his services upon completion of this
Reconfirmation Offering; however, he will be reimbursed for
actual expenses incurred in connection with searching out and
investigating merger and acquisition candidates.
Cyberia has no employment agreements with any of its
executive officers. The following table sets forth information
relating to the cash compensation paid by Cyberia for the year
ended December 31, 1995 to each of Cyberia's highest paid
executive officers whose aggregate cash compensation exceeded
$60,000 per annum, and to all executive officers as a group:
Name of Individual Capacities in Cash
or Number in Group Which Served Compensation
Jay Rifkin President, Chief $85,000
Executive Officer
Hans Zimmer Vice President $65,000
All Executive Officers $150,000
as a Group (3 persons)
The Company does not initially intend to pay Directors for
attending Board of Directors Meetings.
Potential Conflicts of Interest and Other Blank Check Offerings
The proposed business of the Company following the
Acquisition raises potential conflicts of interest between the
Company and its proposed officers and directors. All of the
Company's proposed officers and directors are involved in various
business activities. With respect thereto, they are or may
become officers, directors, controlling shareholders and/or
partners of other entities engaged in a variety of businesses,
similar and dissimilar to the business of the Company. Because
of these affiliations, there are potential conflicts of interest
in their acting as officers and directors of the Company. Such
potential conflicts of interest include, among other things,
time, effort and corporate opportunity involved in their
participation in other business transactions. Since no policy
has established for the resolution of such a conflict, the
Company may be adversely affected should such individuals choose
to place their other business interests before those of the
Company. No assurance can be given that such potential
conflicts of interest will not cause the Company to lose
potential opportunities. Additional conflicts of interest and
non arm's-length transactions may also arise in the future in the
event the Company's officers and directors are involved in the
management, or are shareholders, of any company which the Company
may transact business. Failure by Management to resolve conflicts
of interest in favor of the Company may result in liability of
Management to the Company. Management has and will continue to
have an affirmative obligation to disclose conflicts of interest
to the Company's Board of Directors or shareholders.
Martin Rifkin has been an officer and director of three
other blank check companies which completed offerings of
securities as follows.
1. Capital Ventures Inc. ("Capital Ventures") - Pursuant
to a registration statement effective as of April 9, 1987,
Capital Ventures in August 1987 completed an initial public
offering with the sale of 1,500,000 units at $.10 per unit
(raising gross proceeds of $150,000) with each unit consisting of
one share of common stock, one A warrant and one B warrant. The
purpose of the offering was to obtain funding from persons
purchasing in the offering in order to provide a vehicle to merge
with or acquire business opportunities. Mr. Rifkin was President
of Capital Ventures from its inception until it acquired Starrett
Trading, Inc. ("Starrett") as of December 11, 1987. In
connection with said acquisition, Capital Ventures issued
15,000,000 shares of previously unissued common stock in exchange
for all of the shares of outstanding stock of Starrett, and Mr.
Rifkin simultaneously resigned as an officer of Capital Ventures.
Mr. Rifkin, who was also a director of Capital Ventures since its
inception, continued to serve as a director. Thereafter, and
pursuant to an agreement dated December 10, 1990, Capital
Ventures reversed the transaction with Starrett as of December
28, 1990 whereby (i) Capital Ventures transferred all of the
previously acquired shares of common stock of Starrett in
exchange for the 15,000,000 shares of common stock of Capital
Ventures previously issued, (ii) Capital Ventures was left with
$25,000 in cash and no liabilities of any kind, and (iii) Mr.
Rifkin resumed the position of President and became Treasurer of
Capital Ventures. In order to preserve its minimal amount of
cash and due to its lack of business activities, Capital Ventures
did not file its periodic reports under the Exchange Act during
the 1991 year. On January 29, 1992, Capital Ventures filed a
Form 15 which suspended its obligation to file reports with the
Commission for the periods commencing January 1, 1992. In May
1992, Capital Ventures entered into a letter of intent to acquire
Hi-Tech Computer Products, Inc. ("Hi-Tech"). On June 11, 1992,
Capital Ventures filed late with the Commission its periodic
reports under the Exchange Act which had been due for the periods
ended December 31, 1990, March 31, 1991, June 30, 1991, September
30, 1991 and December 31, 1991. On June 25, 1992, Capital
Ventures completed the acquisition of Hi-Tech. In connection
with such transaction, Capital Ventures acquired 1,000 shares of
common stock of Hi-Tech (100% of its outstanding securities) in
exchange for 4,250,000 shares of common stock of Capital Ventures
(representing 94% of the then outstanding securities of Capital
Ventures). In addition, in connection with such transaction, Mr.
Rifkin simultaneously resigned as an officer and director. To
Mr. Rifkin's knowledge, Capital Ventures has not filed any
reports for any periods subsequent to December 31, 1991 and is
therefore no longer a reporting company with the Commission.
2. Enterprise Venture Corp. ("Enterprise") - Pursuant to a
registration statement effective as of July 2, 1987, Enterprise
in September 1987 completed an initial public offering with the
sale of 1,466,500 units at $.10 per unit (raising gross proceeds
of $146,665) with each unit consisting of one share of common
stock, one A warrant and one B warrant. The purpose of the
offering was to obtain funding from persons purchasing in the
offering in order to provide a vehicle to merge with or acquire
business opportunities. Mr. Rifkin was President and Director of
Enterprise since its inception until it acquired Equipment
Leasing Services, Inc. ("Equipment Leasing") in December 1987.
In connection with such transaction, Enterprise acquired all of
the outstanding shares of common stock of Equipment Leasing in
exchange for 2,000,000 shares of previously unissued common stock
of Enterprise. In addition, the then three stockholders of
Equipment Leasing purchased an aggregate of 2,000,000
outstanding shares of common stock of Enterprise from
Enterprise's then officers and directors (including Martin
Rifkin) for $25,000 in cash. In connection with such
transaction, Mr. Rifkin simultaneously resigned as an officer and
director. In addition, Enterprise thereafter changed its name to
Beaver Creek Silver Company, Inc. To Mr. Rifkin's knowledge,
such company has not filed any reports and is no longer a
reporting company with the Commission since February 1990.
3. Mutual Venture Corp. ("Mutual") - Pursuant to a
registration statement effective as of April 3, 1990, Mutual in
June 1990 completed an initial public offering with the sale of
545,000 units (raising gross proceeds of $54,500) with each unit
consisting of one share of common stock, one A warrant and one B
warrant. The purpose of the offering was to obtain funding from
persons purchasing in the offering in order to provide a vehicle
to merge with or acquire business opportunities. Mr. Rifkin was
President, Secretary and Director of Mutual from its inception
until it acquired Nasshorn Sportswear Corp. ("Nasshorn") in
September 1990. In connection with such transaction, Mutual
acquired all of the outstanding shares of common stock of
Nasshorn in exchange for 3,000,000 shares of previously unissued
common stock of Mutual. In addition, in connection with such
transaction, Mr. Rifkin sold 3,250,000 shares of common stock
owned by him in Mutual to certain affiliates of Nasshorn for an
aggregate of $4,000. Also, Mr. Rifkin was retained by Mutual as
a consultant for one year at a total fee of $6,000. In
connection such transaction, Mr. Rifkin simultaneously resigned
as an officer and director of Mutual as of September 1990. To
Mr. Rifkin's knowledge, in June 1991, Nasshorn changed its name
to Onecard Health Systems Corp. ("Onecard"). In addition, to Mr.
Rifkin's knowledge, Onecard has not filed reports and is no
longer a reporting company with the Commission since August 1992.
In addition to the foregoing companies, Mr. Rifkin was
President, Chairman of the Board, director and a principal
stockholder of Complete Capital Corp. ("Complete Capital"), a
blank check company, which filed a Registration Statement with
the Commission in June 1990. Subsequently, Complete Capital
decided to abandon such offering which was never declared
effective by the Commission. Mr. Rifkin may go forward with this
blank check entity in the future.
Certain detailed information and financial data about the
above companies may be obtained by reviewing the registration
statements on file with the Commission, together with other
subsequent filings.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the date of this
Prospectus, the number and percentages (before and after
completion of the proposed Acquisition) of shares of Common Stock
of the Company owned of record and beneficially by each current
and proposed officer and/or director of the Company and by any
other person who owns and will own upon completion of the
Acquisition more than 5% of the Company's outstanding Common
Stock and by all officers and directors as a group.
Beneficial Ownership Beneficial Ownership
Before Acquisition After Acquisition
Name and Address Shares Percent Shares Percent
Jay Rifkin -0- -0- 12,000,000 40.0%
1547 14th Street
Santa Monica, CA 90404
Hans Zimmer -0- -0- 12,000,000 40.0%
1547 14th Street
Santa Monica, CA 90404
Mark S. Levy -0- -0- 1,500,000 5.0%
1547 14th Street
Santa Monica, CA 90404
Martin Rifkin 4,050,000 90.0% 4,050,000 13.5%
501 S.E. Columbia
Shores Blvd.
#350
Vancouver, WA 98661
All Officers and 4,050,000 90.0% 29,550,000 98.5%
Directors
as a Group (4 Persons)
CERTAIN TRANSACTIONS
The Company was incorporated on February 24, 1994, under the
laws of the State of Delaware, with an authorized capitalization
of 50,000,000 shares of Common Stock, $.0001 par value each. In
April 1994, the Company issued 4,000,000 shares to Martin Rifkin
for cash consideration of $1,000.
In April 1994, the Company borrowed $4,000 from Martin
Rifkin in order to pay certain operating expenses of the Company
and expenses of this offering. Such loans are due on demand and
bear interest at 7% per annum. The Company intends to repay
these loans from the proceeds of this offering. As of June 30,
1996, a total of $4,614 is owing to Mr. Rifkin representing
principal of $4,000 and accrued interest of $614. (See "Use of
Proceeds").
In May 1996, the Company executed an Agreement and Plan of
Tax Free Reorganization with Cyberia and the shareholders of
Cyberia pursuant to which upon successful completion of this
Reconfirmation Offering the Company intends to acquire all of the
issued and outstanding shares of capital stock of Cyberia in
exchange for 25,500,000 shares of Common Stock of the Company.
In 1995, Cyberia paid approximately $40,000 to Media
Ventures, a company operated by Jay Rifkin and Hans Zimmer, for
sound mixing and recording services. Cyberia also paid Media
Ventures $18,375 for related overhead costs. As of December 31,
1995, $18,375 is due to Media Ventures for these costs.
See "Business - Property" for information on the facilities
leased by Cyberia on a month-to-month basis from Media Ventures.
DESCRIPTION OF SECURITIES
Common Stock
The Company is authorized to issue 50,000,000 shares of
Common Stock, par value $.0001. There are currently outstanding
4,500,000 shares. Assuming completion of the proposed
Acquisition, there will be 30,000,000 shares outstanding. The
holders of Common Stock have one vote per share for the election
of Directors, without provision for cumulative voting, and on all
other matters. Thus, holders of more than 50% of the shares
voting for the election of Directors can elect all the
Directors, if they choose to do so. The Common Stock is not
redeemable and has no conversion or preemptive rights. All of
the shares of Common Stock, when issued, will be fully paid and
non-assessable. In the event of liquidation of the Company, the
holders of Common Stock will share equally in any balance of the
corporate assets available for distribution to them after
satisfaction of creditors and the holders of the Company's senior
securities such as debenture holders, if any. The Company may
pay dividends in cash or in securities or other property when and
as declared by the Board of Directors from funds legally
available therefor but has paid no cash dividends on its Common
Stock. The Company presently believes that in the foreseeable
future, all of its earnings, if any, will continue to be retained
for use in its business and, therefore, there is no assurance
when, or if ever, dividends may be paid.
Market for the Company's Common Stock
At the present time, there is no public market for the
securities of the Company. It is unlikely that a regular trading
market will develop at the conclusion of the Reconfirmation
Offering, or if developed, that such market will be sustained, or
that the securities purchased by the public hereunder may be
resold at their original offering price or any other price. It
should be noted that the present sole officer and director of the
Company and the current shareholders of Cyberia will own
approximately 98% of the outstanding shares of common stock upon
completion of the Acquisition and, as a result, there is no
likelihood of an active public trading market, as that term is
commonly understood, developing for the shares. (See also "Risk
Factors - Lack of Public Market for Securities").
Transfer Agent
The Transfer Agent for the Common Stock of the Company
is Idata, Inc., 14675 Midway Road, Suite 221, Dallas, Texas
75244.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law contains
various provisions entitling directors, officers, employees or
agents of the Company to indemnification from judgments, fines,
amounts paid in settlement and reasonable expenses, including
attorneys' fees, as the result of an action or proceeding
(whether civil, criminal, administrative or investigative) in
which they may be involved by reason of being or having been a
director, officer, employee or agent of the Company provided
said persons acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the
Company (and, with respect to any criminal action or proceedings,
had no reasonable cause to believe that the conduct complained
of was unlawful). Also, the Certificate of Incorporation of the
Company states that the indemnification provisions of Section
145 of the Delaware Corporation Law shall be utilized to the
fullest extent permitted.
Insofar as indemnification for liabilities arising under
the Securities Act of 1933, as amended, may be permitted to
directors, officers, or persons controlling the Company pursuant
to the foregoing provisions or otherwise, the Company has been
informed that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Company
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
PLAN OF DISTRIBUTION
The Company through its sole officer and director, and
without the use of a professional underwriter, offered and sold
to the public 500,000 shares of the Company's Common Stock,
$.0001 par value. The Offering was publicly offered only in the
State of New York. In this regard, the Company effected the
appropriate filings in order to publicly offer and sell the
shares in the State of New York.
The Company and its Management have not yet determined
whether or not the Company or anyone acting on its behalf will
take affirmative steps to request or encourage any broker-dealer
to act as a market maker for the Company's securities.
Therefore, the Company is not able to indicate when, how and by
whom such efforts may be undertaken or whether consultants may be
utilized in connection therewith. There have been no preliminary
discussions nor are there any understandings between the Company
or anyone acting on its behalf and any broker-dealer
regarding the participation of any such broker-dealer in
the future trading market, if any, for the Company's securities.
SEC Rules
The Company's Common Stock is covered by a Securities and
Exchange Commission rule that imposes additional sales practice
requirements on broker/dealers who sell such securities to
persons other than established customers and accredited investors
(generally institutions with assets in excess of $5,000,000 or
individuals with net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their
spouses). For transactions covered by the rule, the broker/dealer
must make a special suitability determination for the purchaser
and have received the purchaser's written agreement to the
transaction prior to the sale. Consequently, the rule may affect
the ability of purchasers in this offering to sell their shares
in the secondary market.
Securities and Exchange Commission rules impose additional
sales practice requirements on broker/dealers who sell penny
securities. These rules require a summary of certain essential
items. The items include the risk of investing in penny stocks in
both public offerings and secondary marketing; terms important to
an understanding of the function of the penny stock market, such
as "bid" and "offer" quotes, a dealers "spread" and broker/dealer
compensation; the broker/dealer compensation, the broker/dealers
duties to its customers, including the disclosures required by
any other penny stock disclosure rules; the customers rights and
remedies in cases of fraud in penny stock transactions; and, the
NASD's toll free telephone number and the central number of the
North American Securities Administrators Association, for
information on the disciplinary history of broker/dealers and
their associated persons.
The additional burdens imposed upon broker/dealers by such
requirements may discourage broker/dealers from effecting
transactions in the Common Stock, which could severely limit the
market of the Company's Common Stock.
Rule 419
The Company's Offering and this Reconfirmation Offering are
being conducted in accordance with Commission Rule 419 which was
adopted to strengthen the regulation of securities offerings by
"blank check" companies, which Congress has found to have been
common vehicles for fraud and manipulation in the penny stock
market. The Company is a "blank check" company subject to Rule
419. Accordingly, investors in the Offering receive the
substantive protection provided by Rule 419. Rule 419 requires
that the securities to be issued and the funds received in a
"blank check" offering be deposited and held in an escrow account
until an acquisition meeting specific criteria is completed.
Before the acquisition can be completed and before the funds and
securities can be released, the "blank check" company is required
to update its registration statement with a post-effective
amendment and, after the effective date thereof, the "blank
check" company is required to furnish investors with a prospectus
(which forms a post-effective amendment to its registration
statement) containing specified information, including a
discussion of the business and the audited financial statements
of the proposed acquisition candidate. According to the Rule, the
investors must have no fewer then 20 and no more than 45 business
days from the effective date of the post-effective amendment to
decide whether to remain investors or require the return of their
investment funds. Unless a sufficient number of investors elect
to remain investors, all of the deposited funds in the escrow
account must be returned to all investors and none of the
securities will be issued. Rule 419 further provides that if the
"blank check" company does not complete an acquisition meeting
the specified criteria within 18 months of the date of this
Prospectus, all of the deposited funds must be returned to
investors. In accordance with the provisions of Rule 419, if
funds held in escrow are released to a purchase of the
securities, the purchaser shall receive interest or dividends
earned, if any, on such funds up to the date of release. If
funds held in escrow are released to the Company, interest or
dividends earned on such funds up to the date of release shall be
released to the Company. (See "Prospectus Summary - Investors
Rights to Reconfirm Investment Under Rule 419").
This Prospectus serves as the prospectus required pursuant
to Rule 419 for investors in the Offering to consider
reconfirming their investment in the Company as a result of the
Company's proposed Acquisition.
REPORTS TO SHAREHOLDERS
The Company intends to provide holders of its Common Stock
with annual audited financial statements as soon as practicable
after the end of each fiscal year. In addition, the Company may,
from time to time, issue unaudited interim reports and financial
statements whenever deemed appropriate by its board of directors.
LITIGATION
No material legal proceedings to which either the Company or
Cyberia is a party or of which any of their properties is the
subject are pending or to the knowledge of management are known
to be contemplated.
LEGAL OPINIONS
Danzig, Garubo & Kaye, 75 Livingston Avenue, Roseland, New
Jersey 07068 has acted as counsel for the Company in connection
with this Reconfirmation Offering.
EXPERTS
The audited financial statements of the Company which are
included in this Prospectus have been examined by Glasser and
Haims, P.C., 99 West Hawthorne Avenue, Valley Stream, New York
11580. The audited financial statements of Cyberia which are
included in this Prospectus have been examined by Singer, Lewak,
Greenbaum & Goldstein, LLP, 10960 Wilshire Boulevard, Suite 1100,
Los Angeles, California 90024. These financial statements have
been so included in reliance upon the opinion of such accountants
given upon their authority as experts in auditing and accounting.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange
Commission, Washington, D.C., a Registration Statement on Form
SB-2, relating to the Offering and this Reconfirmation Offering.
This Prospectus does not contain all of the information set forth
in the Registration Statement including the exhibits and
schedules thereto. Statements contained in this Prospectus as to
the contents of any contract or other document referred to are
not necessarily complete and in each instance reference is made
to the copy of such contract or other document filed as an
exhibit to the Registration Statement. For further information
with respect to the Company and the Common Stock, reference is
made to such Registration Statement, including the exhibits and
schedules thereto. The Registration Statement, including the
exhibits and schedules thereto, may be inspected without charge
at the Commission's principal office at 450 Fifth Street, N.W.,
Washington, D.C. Copies of all or any part of such material may
be obtained from the Commission upon payment of certain fees
prescribed by the Commission.
<PAGE>
GLASSER & HAIMS, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
99 WEST HAWTHORNE AVENUE
VALLEY STREAM, N.Y. 11580
ALVIN M. GLASSER, C.P.A.
(516) 568-2700
IRWIN M. HAIMS, C.P.A.
TELECOPIER
(516) 568-2911
REPORT OF CERTIFIED PUBLIC ACCOUNTANTS
THE BOARD OF DIRECTORS
NW VENTURE CORP.
We have audited the accompanying balance sheets of NW Venture
Corp. (a development stage company) as of December 31, 1995 and the
related statements of operations, stockholder's equity, and cash flows
for the period February 24, 1994 (inception) through December 31, 1995.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audit provides reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of NW
Venture Corp. (a development stage company) as of December 31, 1995 and
the results of its operations and cash flows for the period indicated above
in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2
to the financial statements, the Company completed a public offering of
its securities in October 1995, but the Company's ability to continue is
dependent upon the successful completion of a reconfirmation offering
pursuant to Rule 419 of regulation C under the Securities Act of 1933, as
amended. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
GLASSER & HAIMS, P.C.
Valley Stream, New York
March 4, 1996
<PAGE>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1995
ASSETS
CURRENT ASSETS
Cash in bank $ 1,727
TOTAL CURRENT ASSETS $ 1,727
OTHER ASSETS
Organization Expenses
(Net of Amortization) $ 308
Escrow Account (Note 2) 45,342
TOTAL OTHER ASSETS 45,650
TOTAL ASSETS $ 47,377
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Interest payable $ 474
Loans payable
(on demand with interest at 7%) 4,000
TOTAL CURRENT LIABILITIES $ 4,474
STOCKHOLDERS' EQUITY
Common stock, $.0001 par value,
50,000,000 shares authorized,
4,500,000 shares issued and
outstanding (Note 2) $ 400
Capital in excess of par value 600
Deficit accumulated during
development stage (3,097)
$ (2,079)
Temporary Capital
500,000 shares issued and held
by escrow agent 50,000
Offering expenses (5,000)
$ 45,000
TOTAL STOCKHOLDERS' EQUITY 42,903
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 47,377
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
<PAGE>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD
2/24/94
1/1/95 (INCEPTION)
THROUGH THROUGH
12/31/95 12/31/94
REVENUE $ 0 $ 0
EXPENSES 778 292
NET (LOSS) FROM OPERATIONS $ (778) $ (292)
OTHER INCOME:
INTEREST 393 72
NET (LOSS) $ (385) $ (220)
(LOSS) PER SHARE $ (.0001) $ 0
AVERAGE NUMBER OF
SHARES OUTSTANDING 4,125,000 4,000,000
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
THESE FINANCIAL STATEMENTS
<PAGE>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FEBRUARY 24, 1994 (INCEPTION)
THROUGH DECEMBER 31, 1995
<TABLE>
<CAPTION>
DEFICIT
CAPITAL ACCUMULATED
IN DURING
EXCESS OF DEVELOPMENT
SHARES AMOUNT PAR VALUE STAGE TOTAL
<S> <C> <C> <C> <C> <C>
Balance,
February 24, 1994 - $ - $ - $ - $ -
Issuance of shares
to Company officers
and directors
for Cash,
April 21, 1994 4,000,000 400 600 1,000
Net (Loss) for the
period ended
December 31, 1994 (220) (220)
Balance,
Dec. 31, 1994 4,000,000 $ 400 $ 600 $ (220) $ 780
Offering Expenses
October 1995 (2,492) (2,492)
Net (Loss) for
the year ended
December 31, 1995 (385) (385)
4,000,000 $ 400 $ 600 $ (2,097) $ (2,097)
TEMPORARY CAPITAL
Issuance of shares
by Public Offering
October 11, 1995 500,000 $ 50 $49,950 $ $ 50,000
Offering Expenses
October 1995 (5,000) (5,000)
500,000 $ 50 $49,950 $ (5,000) $ 45,000
THE ACCOMPANYING NOTES ARE AN INTEGRAL
PART OF THESE FINANCIAL STATEMENTS
<PAGE>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOW
INCREASE (DECREASE) IN CASH
FOR THE PERIOD FEBRUARY 24, 1994 (INCEPTION)
THROUGH DECEMBER 31, 1995
FOR THE PERIODS
2/24/94
1/1/95 (INCEPTION)
THROUGH THROUGH
12/31/95 12/31/94
Cash flows from operating activities: $ (385) $ (220)
Net income
Adjustment to reconcile net income to net
cash provided by operating activities:
Amortization 100 92
Increase in interest payable 280 194
Net cash provided (used) by
operating activities $ (5) $ 66
Cash flows from financing activities:
Payment for organization expenses $ (500)
Payment for offering expenses (5,351) (2,141)
Increase in escrow account (342)
Increase in loans payable 4,000
Proceeds from issuance of common
stock 5,000 1,000
Net cash provided (used) by
financing activities $ (693) $ 2,359
Net increase (decrease) in cash $ (698) $ 2,425
Cash at beginning of period 2,425 -0-
Cash at end of period $ 1,727 $ 2,425
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS
<PAGE>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNT POLICIES
Organization and Dividend Policy
NW Venture Corp. (the "Company"), was incorporated under the laws
of the State of Delaware on February 24, 1994, and has adopted a December
31 Fiscal Year. The Company is in the development stage, has not commenced
operations, in October 1995 it completed an offering of its securities to
the public (see Note 2). At the present time, the Company has not paid any
dividends, and any future dividends will depend on the Company's financial
requirements and other relevant factors.
Earnings Per Share
The computation of earnings per share is based on the weighted
average number of shares outstanding during the period.
Amortization
Organization expenses are being amortized over sixty months.
Amount shown is net of amortization of $192
Income Taxes
There have been no earnings through April 30, 1995 and
accordingly, no provision for Federal income taxes is reflected in the
accompanying financial statements. The Company has a net operating loss
carryover of $605.
NOTE 2: PROPOSED PUBLIC OFFERING OF SECURITIES
Five Hundred Thousand (500,000) shares of Common Stock was
offered at a purchase of $.10 per share. The offering was completed on
October 11, 1995.
The Company is a "blank check" company and therefore is subject
to Rule 419. Accordingly, investors in this offering will receive the
substantive protection provided by Rule 419. Rule 419 requires that the
securities to be issued and the funds received in a "blank check" offering
be deposited and held in escrow account until an acquisition meeting specific
criteria is completed. Before the acquisition can be completed and before
the funds except for an amount up to 10% of the deposited funds) and
securities can be released, the "blank check" company is required to update
its registration statement with a post-effective amendment and, after the
effective date therefor, the "blank check" company is required to furnish
investors with a prospectus (which forms a part of the posteffective amendment
<PAGE>
to its registration statement) containing specified information,
including a discussion of the business and the audited financial statements
of the proposed acquisition candidate. According to the Rule, the
investors must have no fewer than 20 and no more than 45 business days from
the effective date of the post-effective amendment to decide whether to
remain investors or require the return of their investment funds. Unless a
sufficient number of investors elect to remain investors, all of the
deposited funds in the escrow account must be returned to all investors and
none of the securities will be issued. Rule 419 further provides that if
the "blank check" company does not complete an acquisition meeting the
specified criteria within 18 months of the effective date (June 30, 1995)
of the registration statement relating to the offering, all of the deposited
funds must be returned to investors.
<PAGE>
NOTE 3: COMMITMENTS & CONTINGENCIES
a. At present, the Company does not employ any persons on a
salary basis. The Company's sole officer devotes such time as is
required for the development of the Company without compensation.
In the event the Company successfully completes the acquisition of a
business opportunity, the Board of Directors may award a finder's
fee to Martin Rifkin if the acquisition is largely due to his efforts.
The amount of this finder's fee will not exceed $2,500.
The Company does not initially intend to pay Directors for
attending Board of Directors Meetings.
b. The Company maintains its offices on a rent free,
month-to-month basis in office space provided by its sole officer
and director. The office is located at 501 S.E. Columbia Shores
Boulevard, #350, Vancouver, Washington 98661.
NOTE 4: POTENTIAL CONFLICTS OF INTEREST
The Company's sole officer, director and stockholder is involved
in various business activities. With respect thereto, he is or may become
an officer, director, controlling shareholder and/or partner of other
entities engaged in a variety of business, similar and dissimilar to the
business of the Company, including other "blank check" companies which may
also seek similar available business opportunities. Because of these
affiliations and because of the minor amount of time devoted to the Company
by the Company's sole officer, director and stockholder, there are potential
conflicts of interest in his acting as an officer and director of the Company.
To the extent the Company's sole officer, director and stockholder engages in
such other activities, he will have possible conflicts of interest in
directing opportunities to other companies, entities or persons with which he
is or may be associated or have an interest, rather than direct such
opportunities to the Company. Such potential conflicts of interest include,
among other things, time, effort and corporate opportunity involved in his
participation in other business transactions. Since only limited policies have
been established for the resolution of such a conflict, the Company may be
<PAGE>
adversely affected should he choose to place his other business interests
before those of the Company. No assurance can be given that such potential
conflicts of interest will not cause the Company to lose potential
opportunities. Additional conflicts of interest and non arm's-length
transactions may also arise in the future in the event the Company's sole
officer, director and stockholder is involved in the management, or is a
stockholder, of any company which the Company may merge with or acquire or
with which the Company may transact business.
<PAGE>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
JUNE 30, 1996
ASSETS
CURRENT ASSETS
Cash in bank $ 681
TOTAL CURRENT ASSETS $ 681
OTHER ASSETS
Organization Expenses
(Net of Amortization) $ 258
Escrow Account 46,376
TOTAL OTHER ASSETS 46,634
TOTAL ASSETS $ 47,315
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Interest payable $ 614
Loans payable (on demand with
interest at 7%) 4,000
TOTAL CURRENT LIABILITIES $ 4,614
STOCKHOLDERS' EQUITY
Common stock, $.0001 par value,
50,000,000 shares authorized,
4,000,000 shares issued and
outstanding (Note 2) $ 400
Capital in excess of par value 600
Deficit accumulated during
development stage (3,299)
$ (2,299)
Temporary Capital
500,000 shares issued and held
by esrcow agent 50,000
Offering expenses (5,000)
$ 45,000
TOTAL STOCKHOLDERS' EQUITY 42,701
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $47,315
<PAGE>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD
4/1/96 4/1/95
THROUGH THROUGH
6/30/96 6/30/95
REVENUE $ 0 $ 0
EXPENSES 588 95
NET (LOSS) FROM OPERATIONS $ (588) $ (95)
OTHER INCOME:
INTEREST 516 16
NET (LOSS) $ (72) $ (79)
(LOSS) PER SHARE $ 0 $ 0
AVERAGE NUMBER OF
SHARES OUTSTANDING 4,500,000 4,000,000
<PAGE>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD
1/1/96 1/1/95
THROUGH THROUGH
6/30/96 6/30/95
REVENUE $ 0 $ 0
EXPENSES 1,253 348
NET (LOSS) FROM OPERATIONS $ (1,253) $ (348)
OTHER INCOME:
INTEREST 1,051 33
NET (LOSS) $ (202) $ (315)
(LOSS) PER SHARE $ 0 $ 0
AVERAGE NUMBER OF
SHARES OUTSTANDING 4,500,000 4,000,000
<PAGE>
NW VENTURE CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOW
INCREASE (DECREASE) IN CASH
FOR THE PERIODS
1/1/96 1/1/95
THROUGH THROUGH
6/30/96 6/30/95
Cash flows from operating activities: $ (202) $ (315)
Net income
Adjustment to reconcile net income
to net cash provided by operating
activities:
Amortization 50 50
Increase in interest payable 140 140
Net cash provided (used) by
operating activities $ (12) $ (125)
Cash flows from financing activities:
Payment for prepaid offering expenses 0 (817)
Increase in escrow account (1,034) 0
Net cash provided (used) by
financing activities $ (1,034) $ (817)
Net increase (decrease) in cash $ (1,046) $ (942)
Cash at beginning of period 1,727 2,425
Cash at end of period $ 681 $ 1,483
<PAGE>
NW VENTURE CORP.
NOTES TO FINANCIAL STATEMENTS
The financial information herein is unaudited. However, in
the opinion of management, such information reflects all
adjustments (consisting of normal recurring accruals) necessary
for a fair presentation of the results of operations for the
periods being reported. Additionally, it should be noted that
the accompanying condensed financial statements do not purport to
be complete disclosures in conformity with generally accepted
accounting principles.
The results of operations for the six months ended June
30, 1996 are not necessarily indicative of the results of
operations that may be expected for the full fiscal year ending
December 31, 1996.
These condensed statements should be read in conjunction with
the Company's financial statements for the year ended December
31, 1995.
<PAGE>
CYBERIA, INC.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED
DECEMBER 31, 1995 AND
FEBRUARY 24, 1994 (INCEPTION) TO DECEMBER 31, 1994
<PAGE>
Report of Independent Certified Public Accountants
Board of Directors and Stockholders
Cyberia, Inc.
We have audited the accompanying balance sheet of Cyberia, Inc.
as of December 31, 1995, and the related statements of
operations, stockholders' (deficiency) equity, and cash flows
for the period February 24, 1994 (inception) to December 31,
1994 and for the year ended December 31, 1995. These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of Cyberia, Inc. as of December 31, 1995, and the
results of its operations and its cash flows for the period
February 24, 1994 (inception) to December 31, 1994 and for the
year ended December 31, 1995, in conformity with generally
accepted accounting principles.
Singer, Lewak, Greenbaum & Goldstein, LLP
Los Angeles, California
April 18, 1996
<PAGE>
CYBERIA, INC.
BALANCE SHEET
December 31, 1995
ASSETS
Current assets
Cash $ 80,020
Accounts receivable 64,522
Work in process 19,007
Other current assets 334
Total current assets 163,883
Other assets 5,478
$ 169,361
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities
Accounts payable and accrued expenses $ 32,804
Due to affiliate (note 3) 18,375
Deferred income 148,157
Total liabilities 199,336
Stockholders' deficiency
Common stock: no par value, authorized
1,000,000 shares, issued and outstanding
1,000 shares 1,000
Accumulated deficit (30,975)
Total stockholders' deficiency (29,975)
$ 169,361
<PAGE>
CYBERIA, INC.
STATEMENTS OF OPERATIONS
For the year ended December 31, 1995 and the
period February 24, 1994 (inception) to December 31, 1994
1995 1994
Net sales (note 4) $ 488,237 $ 93,307
Cost of sales 265,944 33,388
General and administrative expenses 263,501 45,064
Total expenses 529,445 78,452
(Loss) income from operations (41,208) 14,855
Other income 1,043
(Loss) income before taxes (40,165) 14,855
Income taxes 4,865 800
Net (loss) income $ (45,030) $ 14,055
<PAGE>
CYBERIA, INC.
STATEMENTS OF STOCKHOLDERS' (DEFICIENCY) EQUITY
For the year ended December 31, 1995 and the
period February 24, 1994 (inception) to December 31, 1994
</TABLE>
<TABLE>
<CAPTION>
Common Stock Accumulated
Shares Amount Deficit Total
<S> <C> <C> <C> <C>
Balance, February 24, 1994
Issuance of common stock 1,000 $ 1,000 $ $ 1,000
Net income 14,055 14,055
Balance, December 31, 1994 1,000 1,000 14,055 15,055
Net loss (45,030) (45,030)
Balance, December 31, 1995 1,000 $ 1,000 $(30,975) $(29,975)
<PAGE>
CYBERIA, INC.
STATEMENTS OF CASH FLOWS
For the year ended December 31, 1995 and the
period February 24, 1994 (inception) to December 31, 1994
1995 1994
Cash flows from operating activities:
Net (loss) income $ (45,030) $ 14,055
Adjustments to reconcile net (loss)
income to net cash provided by
operating activities
Depreciation and amortization 4,370
(Increase) decrease in:
Accounts receivable (45,836) (18,686)
Work in process (19,007)
Other current assets (262) (72)
Other assets (5,647)
Increase (decrease) in:
Accounts payable and accrued
expenses 21,413 11,391
Due to affiliates 18,375
Deferred income 148,157
Net cash provided by operating activities 82,180 1,041
Cash flows used in investing activities:
Purchase of computer equipment (4,201)
Cash provided by financing activities:
Issuance of common stock 1,000
Net increase in cash 77,979 2,041
Cash, beginning of period 2,041
Cash, end of period $ 80,020 $ 2,041
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the periods for
income taxes: $ 4,865 $ 800
<PAGE>
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Line of Business
Cyberia, Inc. (the "Company") was incorporated in California
in February 1994. The Company, composes background music for
television and radio commercials which are aired throughout
the world. The Company sells its services to customers in the
United States.
Estimates
In preparing financial statements in conformity with
generally accepted accounting principles, management makes estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at
the date of the financial statements, as well as the reported
amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Work-in-process
Work-in-process consists of cost incurred on uncompleted contracts.
Deposits and progress billings are recorded as deferred revenue.
Revenue Recognition
Revenues from contracting services are recognized upon
completion of the contract.
Income Taxes
The Company has elected under the Internal Revenue Code to be
an "S" corporation. In lieu of corporate income taxes, the
stockholders of an "S" corporation are taxed on their proportionate
share of the Company's taxable income.
For the year beginning January 1, 1996, the Company has elected to
revoke the "S" corporation status for income tax purposes; therefore,
the Company will be taxed at the federal and state statutory rates.
NOTE 2 - COMMITMENTS
The Company subleases certain facilities for its corporate and
operations offices from a related party on a month-to-month basis
pursuant to a verbal agreement. The related party leases the office
building from a third party, and the lease expires in April 1997.
Rent expense paid to this related party was $28,800 and $19,200 for
1995 and 1994, respectively.
NOTE 3 - RELATED PARTY TRANSACTIONS
In 1995, the Company paid approximately $40,000 to Media Ventures,
which has common ownership, for sound mixing and recording services.
The Company also paid Media Ventures $18,375 for related overhead
cost. As of December 31, 1995, $18,375 is due to Media Ventures.
NOTE 4 - SALES
During the year ended December 31, 1995, the Company did business
with three customers whose sales comprised approximately 10%, 19%,
and 35%, respectively, of net sales. During the period ended
December 31, 1994, the Company did business with four customers
whose sales comprised approximately 20%, 20%, 23%, and 32%,
respectively, of net sales.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
CYBERIA, INC.
BALANCE SHEET
JUNE 30,1996
(Unaudited)
ASSETS
<S> <C>
Current Assets
Cash $164,637
Accounts receivable 46,350
Other current assets 7,723
Total current assets 218,710
Non-current assets
Property, plant and equipment(net) 3,813
Organization Expenses(net) 678
Other assets 9,992
Total non-current assets 14,483
Total assets 233,193
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 57,919
Income taxes payable 70,188
Due to affiliate 26,613
Total liabilities 154,720
Stockholders' equity
Common stock 1,000
Additional paid in capital (30,975)
Retained earnings 108,488
Total stockholders' equity 78,473
Total liabilities & stockholders' equity $233,193
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CYBERIA, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE PERIODS
4/1/96 4/1/95
THROUGH THROUGH
6/30/96 6/30/95
<S> <C> <C>
Sales $311,356 $156,760
Cost of sales 137,714 95,526
General and administrative expenses 138,677 43,818
Total expenses 270,391 139,344
Net income from operations 40,965 17,416
Other income 1,174 139
Net income before taxes 42,139 17,555
Income taxes 16,490 3,000
Net income $ 25,649 $ 14,555
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CYBERIA, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
FOR THE PERIODS
1/1/96 1/1/95
THROUGH THROUGH
6/30/96 6/30/95
<S> <C> <C>
Sales $618,215 $251,260
Cost of sales 269,270 149,676
General and administrative expenses 170,483 63,194
Total expenses 439,753 212,870
Net income from operations 178,462 38,390
Other income 1,674 139
Net income before taxes 180,139 38,529
Income taxe provision 71,688 4,065
Net income $108,448 $ 34,464
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CYBERIA, INC.
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED JUNE 30,1996
(Unaudited)
FOR THE PERIODS
1/1/96 1/1/95
THROUGH THROUGH
6/30/96 6/30/95
<S> <C> <C>
Cash flow from operating activities:
Net income $108,448 $ 39,464
Adjustments to reconcile net income
to net cash provided by operating
activities Increase) decrease in:
Accounts receivable 18,172 (36,438)
Work in process 19,007
Other current assets (7,389) (151)
Other assets (5,192)
Increase (decrease) in:
Accounts payable
and accrued expenses 25,115 41,817
Income taxes payable 70,188
Due to affiliates 8,238 9,188
Deferred income (148,157)
Net cash provided by operating activities 88,430 48,880
Cash flows used in investing activities:
Purchase of computer equipment (3,813)
Net increase in cash 84,617 48,880
Cash, beginning of period 80,020 2,041
Cash, end of period $164,637 $ 50,921
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period
for income taxes $ 1,500 $ 4,065
</TABLE>
<PAGE>
CYBERIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)
The results of operations for the interim periods shown in this
report are not necessarily indicative of results to be expected
for the fiscal year. In the opinion of management, the
information contained herein reflects all adjustments necessary
to make the results of operations for the interim periods a fair
statement of such operations. All such adjustments are of a
normal recurring nature.
<PAGE>
NW VENTURE CORP.
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The following unaudited pro forma consolidated balance sheet and
statement of operations of NW Venture Corp. give effect to the
following transaction:
In May 1996, NW Venture Corp. executed an agreement with
Cyberia, Inc., a California Corporation, and its
shareholders to acquire all of the issued and outstanding
shares of capital stock of Cyberia, Inc. For accounting
purposes, the acquisition will be treated as a
recapitalization of NW Venture Corp., with Cyberia, Inc.
as the acquirer (reverse acquisition).
The unaudited pro forma information is based on the historical
financial statements of Cyberia, Inc. giving effect to the
aforementioned transaction and the assumptions and adjustments in
the accompanying notes to the unaudited pro forma financial
statements.
The unaudited pro forma consolidated balance sheet as of December
31,1995 and March 31, 1996, and the consolidated statement of
operations for the year ended December 31, 1995 and the six
months ended June 30, 1996 give effect to the acquisition of
Cyberia, Inc. as if it had occurred January 1, 1995.
The unaudited pro forma consolidated financial statements are not
necessarily indicative of operating results which would have been
achieved had the acquisitions been consummated as of the
beginning of the period and should not be construed as
representative of the future operating results. The unaudited
pro forma consolidated financial statements should be read in
conjunction with the financial statements of Cyberia, Inc. and NW
Venture Corp. at December 31, 1995 and June 30, 1996.
The following notes set forth an explanation of the assumptions
and adjustments used in preparing the unaudited pro forma
consolidated balance sheet and statement of operations:
Adjustments to December 31,1995 Balance Sheet
(a) To record the acquisition of NW Venture Corp. accounted
for as a reverse merger
(b) To adjust common stock and additional paid-in capital
for the recapitalization of Cyberia, Inc. as a result
of the reverse merger.
Adjustments to June 30, 1996 Balance Sheet
(a) To record the acquisition of NW Venture Corp.
accounted for as a reverse merger
(b) To adjust common stock and additional paid-in capital
for the recapitalization of Cyberia, Inc. as a result
of the reverse merger.
<PAGE>
<TABLE>
<CAPTION>
NW VENTURE CORP
PRO FORMA CONSOLIDATED BALANCE SHEET
JUNE 30, 1996
(Unaudited)
Historical Pro Forma
Adjustments
NW Venture Increase ProForma
Corp. Cyberia,Inc. (Decrease) Combined
<S> <C> <C> <C> <C>
ASSETS
Current Assets
Cash $ 681 $164,637 $165,318
Accounts receivable 0 46,350 46,350
Other current assets 0 7,723 7,723
Total current
assets 681 218,710 0 219,391
Non-current assets
Property, plant
and equipment(net) 0 3,813 3,813
Organization
Expenses(net) 258 678 936
Escrow account 46,376 46,376
Other assets 9,992 9,992
Total non-current
assets 46,634 14,483 0 61,117
Total assets $47,315 $233,193 $0 $280,508
LIABILITIES &
STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
and accrued
expenses $ 614 $ 57,919 $ 58,533
Income taxes payable 70,188 70,188
Due to affiliate 26,613 26,613
Loans payable 4,000 4,000
Total liabilities 4,614 154,720 0 159,334
Stockholders' equity
Common stock 400 1,000 1,550(b) 2,950
Additional paid
in capital 600 (30,975) (1,550)(b) (35,224)
(3,299)(a)
Temporary Capital 45,000 45,000
Retained
earnings/
(deficit) (3,299) 108,448 3,299(a) 108,448
Total
stockholders'
equity 42,701 78,473 0 121,174
Total liabilities
& stockholders'
equity $47,315 $233,193 $0 $280,508
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NW VENTURE CORP
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
JUNE 30, 1996
(Unaudited)
Historical Pro Forma
Adjustments
NW Venture Increase ProForma
Corp. Cyberia,Inc. (Decrease) Combined
<S> <C> <C> <C> <C>
Sales $ 0 $618,215 $618,215
Cost of sales 0 269,270 269,270
General and
administrative
expenses 1,253 170,483 171,736
Total Expenses 1,253 439,753 0 441,006
Net income (loss)
from operations (1,253) 178,462 0 177,209
Other income 1,051 1,674 2,725
Net income (loss)
before taxes (202) 180,136 0 179,934
Income taxes 0 71,688 71,688
Net income (loss) ($202) $108,448 $0 $108,246
Income per share $0.01
Weighted average
shares outstanding 30,000,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NW VENTURE CORP
PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 31,1995
(Unaudited)
Historical Pro Forma
Adjustments
NW Venture Increase Pro Forma
Corp. Cyberia,Inc. (Decrease) Combined
ASSETS
<S> <C> <C> <C> <C>
Current Assets
Cash $1,727 $ 80,020 $ 81,747
Accounts receivable 0 64,522 64,522
Work in Process 0 19,007 19,007
Other current
assets 0 334 334
Total current
assets 1,727 163,883 0 165,610
Non-current assets
Organization
Expenses(net) 308 678 986
Escrow account 45,342 0 45,342
Other assets 0 4,800 4,800
Total non-
current
assets 45,650 5,478 0 51,128
Total assets $47,377 $169,361 $0 $216,738
LIABILITIES &
STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable
and accrued
expenses $ 474 $ 32,804 $ 33,278
Due to affiliate 0 18,375 18,375
Deferred Income 0 148,157 148,157
Loans payable 4,000 0 4,000
Total liabilities 4,474 199,336 0 203,810
Stockholders' equity
Common stock 400 1,000 1,550(b) 2,950
Additional paid
in capital 600 0 (1,550)(b) (9,047)
(8,097)(a)
Temporary Capital 45,000 45,000
Accumulated
deficit (3,097) (30,975) 8,097(a) (25,975)
Total
stockholders'
equity 42,903 (29,975) 0 12,928
Total liabilities
& stockholders'
equity $47,377 $169,361 $0 $216,738
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NW VENTURE CORP
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
DECEMBER 31,1995
(Unaudited)
Historical Pro Forma
Adjustments
NW Venture Increase Pro Forma
Corp. Cyberia,Inc. (Decrease)
Combined
<S> <C> <C> <C> <C>
Sales $ 0 $488,237 $488,237
Cost of sales 0 265,944 265,944
General and
administrative
expenses 778 263,501 264,279
Total expenses 778 529,445 0 530,223
Net loss
from operations (778) (41,208) 0 (41,986)
Other income 393 1,043 1,436
Net loss
before taxes (385) (40,165) 0 (40,550)
Income taxes 0 4,865 4,865
Net loss ($385) ($45,030) $0 ($45,415)
Loss per share $0.00
Weighted average
shares outstanding 29,625,000
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
24. Indemnification of Directors and Officers
Reference is made to Section 145 of the Delaware General
Corporation Law which contains various provisions entitling
directors, officers, employees or agents of the Company to
indemnification from judgments, fines, amounts paid in settlement
and reasonable expenses, including attorneys' fees, as the result
of an action or proceeding (whether civil, criminal,
administrative or investigative) in which they may be involved by
reason of being or having been a director, officer, employee or
agent of the Company provided said persons acted in good faith
and in a manner reasonably believed to be in or not opposed to
the best interests of the Company (and, with respect to any
criminal action or proceedings, had no reasonable cause to
believe that the conduct complained of was unlawful). Also, the
Certificate of Incorporation of the Company states that the
indemnification provisions of Section 145 of the Delaware
Corporation Law shall be utilized to the fullest extent
permitted.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers,
or persons controlling the Company pursuant to the foregoing
provisions, or otherwise, the Company has been informed that in
the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act
and is therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Company of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
25. Other Expenses of Issuance and Distribution
<TABLE>
<CAPTION>
The expenses of the offering are estimated to be as follows.
All of such expenses will be paid by the Company.
<S> <C>
Registration Fees $ 100.00
Accounting Fees 1,000.00*
Legal Fees 10,000.00*
Printing, Blue Sky Fees,
Transfer Agent Fees,
Miscellaneous Fees and
Expenses 2,900.00*
TOTAL $14,000.00*
</TABLE>
*Estimated
<PAGE>
26. Recent Sales of Unregistered Securities
In April 1994, the Registrant sold 4,000,000 shares of Common
Stock to Martin Rifkin for $1,000.
The aforesaid securities were issued without registration
under the Securities Act of 1933, as amended, by reason of the
exemption from registration afforded pursuant to the provisions
of Section 4(2) thereof as transactions by an issuer not
involving any public offering. No underwriting discounts or
commissions were paid in connection with any of such issuances.
<PAGE>
27. Exhibits
Exhibit
Number
3.1 Registrant's certificate of incorporation(1)
3.2 Registrant's by-laws(1)
4.1 Specimen certificate for common stock(1)
4.2 Promissory Note with Martin Rifkin
5.1 Opinion of David M. Kaye, Esq.(1)
10.1 Agreement and Plan of Tax Free Reorganization dated
May 22, 1996 by and among NW Venture Corp., Cyberia, Inc.
("Cyberia") and the shareholders of Cyberia(2)
24.1 Consent of Danzig, Garubo & Kaye(2)
24.2 Consent of Glasser & Haims, P.C.
24.3 Consent of Singer, Lewak, Greenbaum & Goldstein, LLP
28.1 Escrow Agreement (form)(1)
(1) Filed with original filing.
(2) Filed with Post-Effective No. 1 to Form SB-2.
<PAGE>
28. Undertakings
To file during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement.
To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
To reflect in the Prospectus any facts or events arising
after the effective date of this Registration Statement (for the most
recent post-effective amendment thereof) which individually, or,
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement, including (but not limited to) any
addition or deletion of a managing Underwriter.
That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
The undersigned registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to whom the
prospectus is sent or given, the latest annual report to security
holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3
or Rule 14c-3 under the Securities Exchange Act of 1934; and,
where interim financial information required to be presented by
Article 3 of Regulation S-X are not set forth in the prospectus,
to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to
provide such interim financial information.
The undersigned registrant hereby undertakes to provide to
<PAGE>
the underwriter at the closing specified in the underwriting
agreements, certificates in such denominations and registered in
such names as required by the underwriter to permit prompt
delivery to each purchaser.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 being permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit of proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
SB-2 and authorized this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in
the City of Vancouver, State of Washington on the 30th of
October, 1996.
NW VENTURE CORP.
By:/s/Martin Rifkin
Martin Rifkin,
President
In accordance with the requirements of the Securities Act of
1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/Martin Rifkin President, Secretary, 10/30/96
Martin Rifkin Treasurer, Director
Principal Executive Officer
and Principal Financial
Officer)
<PAGE>
Registration No. 33-83418-LA
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
EXHIBITS
filed with
POST EFFECTIVE AMENDMENT NO. 2 TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
NW VENTURE CORP.
<PAGE>
INDEX TO EXHIBITS
Page
Exhibit Number Number
3.1 Registrant's certificate of incorporation(1)
3.2 Registrant's by-laws(1)
4.1 Specimen certificate for common stock(1)
4.2 Promissory Note with Martin Rifkin
5.1 Opinion of David M. Kaye, Esq.(1)
10.1 Agreement and Plan of Tax Free Reorganization
dated May 22, 1996 by and among NW Venture Corp.,
Cyberia, Inc. ("Cyberia")and the shareholders of
Cyberia(2)
24.1 Consent of Danzig, Garubo & Kaye(2)
24.2 Consent of Glasser & Haims, P.C.
24.3 Consent of Singer, Lewak, Greenbaum & Goldstein,
LLP
28.1 Escrow Agreement (form)(1)
(1)Filed with original Filing.
(2)Filed with Post-Effective Amendment No. 1 to Form SB-2
<PAGE>
Exhibit 4.2
PROMISSORY NOTE
$4,000.00 April 21, 1994
FOR VALUE RECEIVED, N.W. Venture Corp., a Delaware
corporation (the "Maker") promises to pay on demand to the order
of Martin Rifkin, at 501 S.E. Columbia Shores Blvd., No. 350,
Vancouver, Washington 98661 or at such other place or to such
other party as the then holder of this Note may from time to time
designate in writing, the principal sum of Four Thousand Dollars
($4,000.00), together with interest (computed for the actual
number of days elapsed on the basis of a year of 365 days) in
respect of the unpaid principal from the date hereof until
maturity, at the rate of seven percent (7%) per annum.
This Note may be prepaid from time to time in whole or in
part without penalty or premium.
Demand, presentment, protest and notice of non-payment and
protest are hereby waived by the Maker.
This Note shall be governed by and construed in accordance
with the laws of the State of Washington.
IN WITNESS WHEREOF, the Maker does hereby execute this Note
as of the date first above written.
N.W. VENTURE CORP.
By: /s/Martin Rifkin
Martin Rifkin,
President
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
use of our report and to all references to our firm included in
or made a part of the Registration Statement on Form SB-2 of NW
Venture Corp.
/s/Glasser & Haims
Glasser & Haims, P.C.
Valley Stream, New York
October 16, 1996
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated April 18, 1996 accompanying
the financial statements of Cyberia, Inc. contained in this Post
Effective Amendment No. 2 Registration Statement on Form SB-2.
We consent to the use of the aforementioned report
in the Registration Statement and Prospectus, and to the use of
our name as it appears under the caption "Experts."
/s/Singer, Lewak, Greenbaum & Goldstein, LLP
Singer, Lewak, Greenbaum & Goldstein, LLP
Los Angeles, California
November 4, 1996
<PAGE>